Refrigeration Oil Market to Reflect Tremendous Growth Potential...

Refrigeration Oil Market to Reflect Tremendous Growth Potential with A CAGR of 4.2% BY 2028

Posted 2023-08-03 06:47:25

Market Overview: The refrigeration oil market is expected to witness a steady growth rate of 4.2% in terms of value, progressing from USD 1,147.6 Million in 2020 to reach USD 1,618.1 Million by 2028. Refrigeration oil plays a vital role in lubricating compressor systems within refrigeration units, enabling the generation of cold air. By reducing friction between metal parts, the oil minimizes compressor wear and extends its lifespan. Refrigeration oil is a specialized high-temperature lubricant designed for cooling systems and is typically derived from either mineral oil or synthetic derivatives.

Usage of mineral oils remains predominant in refrigeration systems, with cold chain services supporting global perishable food distribution valued at nearly USD 250.00 billion in 2016, as per the International Trade Organization. The growth of the cold chain market, driven by increased consumption of frozen foods, is anticipated to fuel the demand for refrigeration oil in the forecast period.

The COVID-19 pandemic has significantly impacted the refrigeration oil industry, resulting in reduced product demand across various end-use markets, disruptions in worldwide supply chains, and changes in the competitive landscape among manufacturers. The decline in demand has led to an oversupply situation in the global market. However, it is expected that once movement restrictions ease, and social distancing measures are lifted, the market will gradually return to normal conditions.

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Moreover, stringent governmental regulations aimed at limiting the use of fluorocarbons may pose challenges to market growth during the forecast period.

Application Outlook: The growing demand for air-conditioning in developing countries is a major driver for the refrigeration oil market. The increasing use of air-conditioning in both human comfort and various industrial processes, such as information technology and biotechnology, has become crucial. Studies have shown that inappropriate ambient temperatures negatively impact workforce efficiency, leading to reduced productivity and economic losses. Developing economies have witnessed a significant rise in air-conditioning adoption, resulting in higher demand for refrigerant compressors.

End-Use Outlook: The residential sector is expected to dominate the market with a growth rate of 4.5% throughout the forecast period. This dominance is attributed to the rising demand for refrigeration systems in residential applications.

The commercial sector is projected to grow at a CAGR of 4.6% during the forecast period. The increasing number of supermarkets and hypermarkets necessitates the deployment of HVAC systems for temperature and air quality control, driving the demand for refrigeration oil in commercial applications.

Refrigeration significantly impacts human health by preserving food and pharmaceutical drugs, as well as enabling low-temperature therapeutic techniques. By hindering the development of bacteria and toxic pathogens, refrigeration prevents foodborne diseases and reduces the need for chemical preservatives in food.

Regional Outlook: The Asia Pacific region is expected to witness the fastest growth rate of 5.0% in the forecast period. Strong economic growth in India and China, leading to an increased number of retail stores and outlets, will support market growth. Rising disposable income in the region plays a vital role in boosting the demand for compressors.

North America is projected to grow at a rate of 4.3% during the forecast period. Rapid industrialization in Mexico, which has become a leading automobile production hub, along with growth in the petrochemical industry in the US and Canada, is expected to influence market demand.

Market-O-Nomics: Several factors support the global refrigeration oil market, including the preference for low global warming potential (GWP) refrigerants, rebates offered by regional governments and NGOs to promote energy-efficient products, and technological advancements, such as the advent of HVAC&R systems in the healthcare sector. Given that refrigeration systems consume over 17% of the global electricity consumption, there is a growing demand for energy-efficient refrigeration oils in the coming years.

Hydro chlorofluorocarbon holds the highest market share of 35.0% globally as of 2018, while hydro fluorocarbon is expected to be the fastest-growing market segment during the forecast period with a CAGR of 5.4%. Refrigerators have the highest market share of 41.0% in the refrigeration oil market, valued at USD 4.21 billion in 2018 and projected to reach over USD 6.00 billion by 2028.

Competitive Landscape: Key players in the market include JXTG Holdings Inc., BASF SE, China Petrochemical Corporation, Shell Global, Exxon Mobil Corporation, Total, Meiwa Corporation, Indian Oil Corporation Ltd, Behr Hella Service Gmbh, Cosmo Oil Lubricants Co. Ltd., Calumet Specialty Products Partners L.P., Lubriplate Lubricants Company, Petronas, Petro-Canada Lubricants Inc., and Idemitsu Kosan Co., among others.

These players have adopted various strategies related to the market between 2017 and 2020. For instance, BASF India Limited, a subsidiary of BASF SE, established a technical lab for lubricant solutions in Navi Mumbai, India, in September 2017, offering high-performance lubricants for industrial applications.

Expert Insights: Industry experts foresee promising developments in the adoption of refrigeration oil. The use of this oil in the commercial and residential sectors is gaining significant traction in the market. New entrants to the industry are likely to focus on designing and developing innovative products to meet the increasing demands of end-users.

Market Segmentation: The report provides revenue growth forecasts at the global, regional, and country levels, along with an analysis of industry trends in each sub-segment from 2017 to 2028. The segmentation is as follows:

Product Outlook: Mineral Oil, Synthetic Oil
Refrigeration Type Outlook: Hydro Chlorofluorocarbon, Chlorofluorocarbon, Hydro Fluorocarbon, Ammonia
Application Outlook: Air Conditioners, Coolers, Chillers, Refrigerators, Condensers
End-Use Outlook: Residential, Commercial, Industrial
Regional Outlook: North America (U.S, Canada), Europe (Germany, UK, France, Benelux, Rest of Europe), Asia Pacific (China, India, Japan, South Korea, Rest of Asia Pacific), Latin America (Brazil, Rest of Latin America), MEA (Saudi Arabia, UAE, Rest of the Middle East and Africa)

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