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The Transformer Oil Market size is estimated to grow at a CAGR of 8.76% between 2022 and 2027 and the size of the market is forecast to increase by USD 1,155.29 million. The growth of the market depends on several factors such as expansion of T&D, modernization of existing transformers, and increasing adoption of renewable energy sources.
This report extensively covers market segmentation by end-user (industrial, utilities, commercial, and residential), product (mineral-based, silicon-based, and bio-based), and geography (APAC, North America, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
Transformer Oil Market Forecast 2023-2027
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Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market. Although there has been a disruption in the growth of the market during the COVID-19 pandemic, a holistic analysis of drivers, trends, and challenges will help companies refine marketing strategies to gain a competitive advantage.
One of the main factors which are fuelling the growth of the global transformer oil market includes an increase in the installation of new transformers and the replacement of old transformers with new ones. As existing networks cannot meet the growth in the demand for power, most of the T&D infrastructure globally needs renovation.
There is an increasing requirement to replace the old systems with new ones and to expand the existing infrastructure.For instance, according to the US Depart of Energy, more than 70% of US grid transmission lines and power transformers are over 25 years old. Smart grid networks are also being increasingly used in many countries.Thus, the need for transformer oil is also increasing, with more transformers being installed in the grid. Such factors can significantly drive the global transformer oil market during the forecast period.
Due to growing environmental concerns by consumers, several transformer manufacturers have started designing and manufacturing environment-friendly products. There is an increasing demand for transformers that involve minimal environmental hazards and, at the same time, offer improved life cycle costs, minimal maintenance requirements, and enhanced service life.
For instance, manufacturers such as General Electric have been focusing on the production of green transformers that are energy-efficient, market-efficient, grid-reliable, and environment-friendly to meet the growing demand. One of the key innovative eco-friendly transformer offerings for environment-friendly consumers is the green transformer. The main feature of these transformers is the advanced online monitoring systems to improve operational management which prevent the occurrence of faults and damages. Thus the emergence of such eco-efficient transformers can drive the global transformer oil market during the forecast period.
The demand for mineral oil such as naphthenic and paraffinic oils which are used in transformer oil in end-user industries are adversely affected by fluctuations in crude oil prices.For instance, as per the IEA, the average cost of crude oil was USD 73.6 bbl in October 2018. However, in H1 2022, the average cost of crude oil was more than USD 100/bbl. The unexpected price fluctuations and the recent frequent volatility in crude oil prices, it has severely affected the petroleum industry. Thus, such factors can significantly hinder the growth of the global transformer oil market during the forecast period.
The industrial segment will account for a major share of the market's growth during the forecast period. There is increasing adoption of transformer oil in industries to capitalize on the reliability benefits. The main reason for this deployment of transformer oil in the industrial sector is to ensure a continuous and stable power supply without any voltage fluctuations, reducing the risk of downtime.
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The industrial segment was valued at USD 591.98 million in 2017 and continued to grow until 2021. As, the need of transformers in the industrial segment arises mostly when supplies from power utilities fail to meet power requirements, there is a relatively low demand for transformers from the industrial segment when compared to the power utilities segment. Furthermore, as large industrial end-users require variable power, which is met by their own transformers, such transformers are more common in industries such as oil and gas, chemical and petrochemical, and water and wastewater, which require large amounts of power for multiple processes. Also, factors such as increasing solar and wind power use in the industrial sector will create more demand for transformers. Thus such factors can significantly drive the growth of the industrial segment during the forecast period.
Based on product, the market has been segmented into mineral-based, silicon-based and bio-based. Due to the high viscosity gradient, extended dielectric properties, and withstanding capabilities of mineral-based products,it has a major market share under the product segment. Naphthenic and paraffinic oils are popularly used as a base oil in the production of transformer oil and lubricant base stock. Some of the application areas of naphthenic oil include metal shaping and forming processes, including structural steel, automotive body panels, and other components, Factors such as easy availability and wider usage in capacitors, high voltage switches, and circuit breakers drive the demand for mineral-based transformer oil during the forecast period.
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APAC is estimated to contribute 55% to the growth by 2027. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. Due to the rising urban population and the growing significance of the industrial sector (such as the growth of the manufacturing sector in India), countries like China, India, Vietnam, Thailand, and the Philippines have been exhibiting increased demand for electric power every year. As a result, there is increased installation and expansion of T and D equipment, such as power and distribution transformers, within the existing grid to expand the network. China is heavily investing in expanding its T and D network. For instance, State Grid, the Chinese largest utility, is expected to begin the construction of USD22 billion of new long-distance, ultra-high-voltage transmission lines. Moreover, power generation capacity is expected to increase substantially by the end of 2023, which will increase the demand for transformer oil in the country. Hence, such factors will significantly drive the global transformer oil market in the region during the forecast period.
In 2020, during the COVID-19 pandemic, the growth of global binge-eating disorder treatment market witnessed a significant slowdown to the temporary halt/shutdown of industrial units. As a result, there is a reduced demand for electricity, which, in turn, reduced the demand for transformer oil in the region. However,in 2021, the initiation of large-scale vaccination drives?has lifted the lockdown and travel restrictions, which led to the resumption of supply chain activities in 2021, which increased the demand for transformer oil in the region.Such factors are expected to drive the market during the forecast period.
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Calumet Specialty Products Partners L.P: The company offers transformer oils such as Caltran.
Exxon Mobil Corp: The company offers transformer oils such as HyVolt C50A.
We also have detailed analyses of the market’s competitive landscape and offer information on 15 market vendors, including:
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies vendors into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Vendors are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The transformer oil market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Transformer Oil Market Scope |
|
Report Coverage |
Details |
Page number |
177 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 8.76% |
Market growth 2023-2027 |
USD 1,155.29 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
7.17 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 55% |
Key countries |
US, Canada, China, India, and Japan |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Apar Industries Ltd., BP Plc, Calumet Specialty Products Partners L.P., Cargill Inc., Chevron Corp., Dow Chemical Co., Edens Garden Inc., Ergon Inc., Exxon Mobil Corp., Hinduja Group Ltd., Lubrita Europe BV, Neste Corp., Nynas AB, PETRONAS Chemicals Group Berhad, Phillips 66, Repsol SA, Savita Oil Technologies Ltd., Shell plc, Sinopec Shanghai Petrochemical Co. Ltd., and TotalEnergies SE |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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