August 17, 2016 - 2:23 PM EDT
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Mineral-Based Oil Segment Will Dominate the Global Transformer Oil Market with an Impressive Market Share of 90% in 2020, Says Technavio

According to the latest market study released by Technavio, the global transformer oil market is expected to grow at a CAGR of nearly 9% during the forecast period.

This research report titled ‘Global Transformer Oil Market 2016-2020’ provides an in-depth analysis of the market in terms of revenue and emerging market trends. To calculate the market size, Technavio has considered the demand for transformer oil from power and distribution transformers across the globe.

Global energy consumption increased by approximately 10% from 2010 to reach 20,567 TWh in 2015. It is expected to increase by almost 15%-20% by 2020. T&D network expansion and renovation are required to cater to the growing need for uninterrupted and quality power supply. Curbing electrical faults in equipment responsible for the transmission and distribution of electric power ensures the required supply. Transformer oil plays a major role in arc-quenching in transformers, protecting them from any fire damage.

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Technavio’s heavy industry analysts categorizes the global transformer oil market into three major segments by product. They are:

  • Mineral-based
  • Silicone-based
  • Bio-based

Market share by product type 2015 and 2020 (revenue %)

Product type     2015       2020  
Mineral-based 91% 90%
Silicone-based 5% 6%
Bio-based   4%   5%

Source: Technavio


Global mineral-based transformer oil market

The mineral-based oil segment of the global transformer oil market generated the most revenue in 2015, valued at USD 1.834 billion. This will likely rise to USD 2.791 billion by 2020, growing at an estimated CAGR of close to 9%. The main factor driving this segment is the wide-scale use of mineral-based transformer oil in power and distribution transformers, switchgear, and circuit breakers, especially in APAC. This oil is priced reasonably compared to other forms and is therefore, popular among the cost-sensitive customers in the region.

Mineral-based transformer oil can be further segmented into:

  • Naphthenic oil
  • Paraffinic oil

Naphthenic crude oil undergoes fractional distillation and a subsequent hydrotreating process to produce naphthenic oil. Similarly, paraffinic crude oil undergoes solvent separation and hydrocracking procedures to form paraffinic oil.

Global silicone-based transformer oil market

The silicone-based oil segment of the global transformer oil market was valued at USD 109.4 million in 2015 and should reach USD 180.2 million by 2020, growing at an estimated CAGR of almost 11%. According to Gaurav Mohindru, a lead unit operations research analyst, “Silicone-based transformer oil is used in applications that prioritize fire safety and thermal stability. This type of oil is a polymer whose molecular structure consists of oxygen atom, silicone atom, and methyl group.”

The molecular weight of the fluid is determined based on the number of times the molecular structure is repeated, which determines the viscosity of the fluid.

Silicone-based transformer oils have the following properties:

  • Environmentally friendly
  • Non-flammable
  • Excellent dielectric coolants
  • High dielectric strength
  • Lower viscosity than petroleum-based oils

Global bio-based transformer oil market

The bio-based segment of the global transformer oil market was valued at USD 83.1 million in 2015, which Technavio expects to reach USD 141.3 million by 2020, growing at an estimated CAGR of more than 11%. “Bio-based transformer oil is produced from vegetable oil feedstock. It does not have impurities, such as petroleum hydrocarbons, silicones, or halogens. In the event of leakage or spillage, the oil biodegrades quickly, and its non-toxic nature and higher fire-resistant attributes may help this segment gain traction in the market. In addition, the rising demand for renewable energy sources from manufacturing companies is a major factor driving growth in this segment,” adds Gaurav.

Vendor Spotlight: Ergon, Inc.

Founded in 1954 and headquartered in Jackson, Mississippi, Ergon, Inc., and its consolidated subsidiaries are built on a foundation of petroleum-related enterprises. Ergon operates as a sophisticated crude oil processor, transporter and marketer of refined products. In 1978, the company formed Ergon Refining and began production of fuels at its first refinery in Vicksburg, Mississippi. The refinery has grown to be the largest manufacturer of naphthenic process oils in the world and currently has a processing capacity of up to 25,000 barrels of crude oil per day. It produces some of the highest quality transformer oils, HyVolt, along with process and base oil stocks. After recent investments in the facility, Ergon will be the world’s second largest Group I bright stock supplier by year’s end.

Ergon offers various market solutions on a global scale, in North and South America as well as the EMEA & Asia regions. The company’s primary brands are represented by HyVolt - insulating oils, HyPrene - process oils, HyGold - base oils, and HyPrint - ink oils.

Other top vendors highlighted by Technavio’s research analysts in this report include:

  • Apar Industries
  • Nynas
  • PetroChina
  • Sinopec

Browse Related Reports:

Do you need a report on a market in a specific geographical cluster or country but can’t find what you’re looking for? Don’t worry, Technavio also takes client requests. Please contact [email protected] with your requirements and our analysts will be happy to create a customized report just for you.

About Technavio

Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.

Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.

If you are interested in more information, please contact our media team at [email protected].

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 630 333 9501
UK: +44 208 123 1770

Source: Business Wire (August 17, 2016 - 2:23 PM EDT)

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