Transformers oil is also popularly known as insulating oil. There are four types of transformer oils; paraffinic based transformer oil, bio-based transformer oil, naphthenic based transformer oil, and silicone-based transformer oil. The paraffinic based transformer oil type has good oxidation durability and has high-temperature viscosity. The bio-based transformer oil is a non-toxic type and has better resistance to fire. Naphthenic based transformer oil is known for its heat distribution property. This type of oil is helpful for the formation of automatic transmission fluids and hydraulic fluids. Silicone-based transformer oil is known for its high dielectric strength and low viscosity change.

Transformer oil has numerous properties such as the ability to stay stable even at high temperatures, brilliant insulating properties, and cooling characteristics. Beroe’s transformer oil analysis states that the global market will grow at a CAGR of more than 8% until the end of 2022 with a market value of over $3.3 billion. Currently, the transformer oil market can be segmented into three main markets; North America, Europe, and the Asia Pacific. The global market size is above $2.2 billion. The market value of transformer oil in the Asia Pacific region is $0.989 billion, in Europe the market value is $0.421 billion, and in North America, the value is $0.409 billion.

According to Beroe’s 2020 market intelligence report, the high market maturity regions include the Middle East, the Asia Pacific region, and Africa. Medium market maturity regions include Europe and North America. The Asia Pacific market accounts for 44% of the market share while North America accounts for 17% of the market share, and Europe accounts for 19% of the market share. The rest of the world accounts for 20% of the transformer oil market. There are a few key global suppliers that you should know about. Nynas AB is one of the leading suppliers. It is followed by Ergon Inc., APAR Industries Ltd., Calumet Specialty Products, Sinopec, and PetroChina.

The transformer market has been doing well because, during the 5 years from 2010 to 2015, there was an increase in energy consumption globally. The 10% increase that took place during this period caused a rise in the investment of transformer oil. This led to a boom in the transformer oil market. During the 1960s to 1980s, developed regions such as Europe and the US made major investments in the construction and infrastructure industries. Now, the transformers need to be revamped. Hence, an increase in demand for transformer oil will be present which means the supply and production will increase. This will help drive the market further.

An increase in electricity demand in developed and developing regions will lead to the growth of the transformer oil market. Globally, it is India and China that will push the demand for transformer oil in the future in the Asia Pacific region. Procurement intelligence experts, Beroe, predict that this trend will continue for the next 8 years. The reason is heavy investment in these regions for rural and urban infrastructure. Beroe predicts that there will be an increase in manufacturers of transformer oil in the developing regions due to an excess of demand for transformer oil that is going to increase in the future.

When it comes to the production of transformer oil, mineral-based transformer oil is going to continue to lead until 2020. These types of transformer oil include paraffinic and naphthenic oil. The developing regions will have a higher demand for paraffinic transformer oil and so the growth is going to be bigger than that of naphthenic oil. The production and supply of the naphthenic transformer oil is higher at present. The reason behind it is that it has demanded from the developed regions. The alternate transformer oil types, bio-based oil, and silicone-based oil, are witnessing an increase in demand due to their environment-friendly properties.

The production of the alternate types of transformer oil has increased because mineral-based transformer oil has caused some environmental issues. Many of the top suppliers such as Cargill are now concentrating on the production of the alternate transformer oil types mainly because of their environmental properties. However, the applications of the alternate transformer oil are limited in nature which is why even if there is an increase in market share it will take place marginally. The demand for transformer oil from utility companies is 12%. They use the transformer oil to keep the current transformers functioning well. Demand will increase from this section too.

The transformer oil market will see a decrease in demand from capacitors. Capacitors use dielectric transformer oil. 3% of the demand for transformer oil comes from capacitors. However, these are not being used as much anymore. Solid-state capacitors are used instead because they are more reliable and they perform better. In the past, especially in the US, transformer oil was re-used and the sales for these increased in 2017. The transformer oil was only used after the refining process that removed any impurities that existed in the oil. Overall, the market for transformer oil looks bright.