Industry Insights

The global transformer oil market size was estimated at USD 1.56 billion in 2016 and is expected to grow at a rate of 11.5% from 2017 to 2025. Expansion in the power sector to meet growing electricity requirements has driven significant progress in the transformers industry. The increasing focus on rural electrification in emerging economies such as India and China, coupled with a widespread awareness regarding equipment maintenance has driven market demand.

Rapid urbanization, drastic industrialization and the progressive access to modern electricity grids in major parts of rural areas in Asia Pacific have led to an increase in electricity consumption. The electricity demand in this region alone has nearly doubled in the last few years. Growing consumer requirements and the exponential development in distribution networks has also contributed to industry growth.

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Product Insights

Mineral-based oils emerged as the dominant product occupying over 82% of the volume share in 2016. Ease of availability and high compatibility with diverse equipment has made it popular across a wide range of applications in capacitors, high voltage switches and circuit breakers. This segment is further categorized into naphthenic base oils and paraffinic base oils.

Paraffinic base oil is utilized for its low cost and availability across diverse global regions. Crude naphthenic oil is found in limited countries including China, Brazil, Australia, the U.S and Venezuela, restricting its penetration in the global industry.

Bio-based oils are expected to emerge as the fastest-growing products with an approximate CAGR of 14% from 2017 to 2025. Stringent environmental regulations regarding energy consumption & emissions, coupled with high investments in the renewable energy sector are expected to positively influence the growth.

Application Insights

Small-scale transformers dominated the market with over 48% overall revenue in 2016. These systems are extensively utilized to meet burgeoning electricity needs in small localities or rural areas with limited space.

Growing urbanization and electrification of rural areas in Southeast Asian countries such as India, Bangladesh and Sri Lanka has contributed significantly to segment growth. Consumers also tend to go in for bulk purchases to offset high costs associated with complicated filling processes, which has driven higher market volume and sales in recent years.

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Regional Insights

Asia Pacific emerged as the leading consumer, accounting for over 51% of the total volume in 2016. Increasing need to upgrade & transform existing electricity distribution infrastructure in developing countries such as India, Vietnam, Thailand and Indonesia is one of the major driving forces for such products.

China accounted for approximately 44% of the Asia Pacific market. Most of the cities China are well equipped with electric poles, connection lines and have widespread distribution networks, generating the need for upkeep & maintenance of equipment by utilizing efficient oils.

North America emerged as the second largest consumer and is expected to grow at a moderate pace owing to maturation of the manufacturing & industrial sectors, especially in the U.S. and Canada. Modernization of the existing transformers and technical upgradation, coupled with declining crude oil prices is expected to propel growth in the country.

Competitive Insights

Primary players in the market include BASF SE, Dairen Chemical Corporation, Nynas AB, Ergon Inc., Valvoline, PetroChina Company Ltd, Sinopec Corporation and Cargill Inc. among several others such as Calumet Specialty Products, Engen Petroleum Ltd., Hydrodec Group Plc, Royal Dutch Shell, Hyrax Oil Sdn Bhd, Eden Oil, Emirates Lube Oil Company and Electrical Oil Services.

Report Scope

Attribute & Details

Base year for estimation

2016

Actual estimates/Historical data

2014 - 2016

Forecast period

2017 - 2025

Market representation

Volume in kilo tons, revenue in USD Million & CAGR from 2017 to 2025

Regional scope

North America, Europe, Asia Pacific, Latin America, Middle East & Africa

Country scope

U.S, Canada, , UK, Germany, France, UK, Italy, Russia, China, India, Japan, Mexico, Brazil, Saudi Arabia, UAE, and Oman

Report coverage

Volume & revenue forecast, competitive landscape, growth factors and trends

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