Process Oils Market

Market Overview

The process oils market size was valued at USD 4,578.81 million in 2022. It is projected to reach USD 6,007.08 million by 2031, growing at a CAGR of 2.50% during the forecast period (2023-2031). 

Process oils such as naphthenic, non-carcinogenic, aromatic, and paraffinic are utilized in various chemical and technical industries as raw material components and aid in processing. The process oil market is expanding due to the expanding automotive industry, which is used to produce floor mats, conveyor belts, tread rubber, and car tires, among other things. Process oils are used in several agricultural goods, including insecticides, fertilizers, and crop protection oils. They are also used in various industries, such as manufacturing leather goods, textiles, and personal care products.
Additionally, it is predicted that the process oil industry will expand throughout the projection period due to the rising demand for process oil in the pharmaceutical and healthcare sectors to manufacture medical devices, medical tapes, enhanced drug delivery, and other applications.

Market Dynamics

Global Process Oils Market Drivers:

Rising Polymer Production

The creation of polymer compounds relies heavily on process oils. Compound polymers frequently have a process oil content of 20–50%. Plastics such as crystalline polystyrene (PS), high-impact polystyrene (HIPS), polyolefins, thermoplastic elastomers, and several other polymers are mixed with polymer oils. The demand for process oils is significantly increased by an increase in the manufacture of these polymers, which ultimately acts as a market driver. They enhance and regulate the resulting polymer's melt flow rate. 

One kind of hydrobrite polymer oils is also used in the formulations of PS (Polystyrene), PVC (Polyvinyl Chloride), PP (Polypropylene), PE (Polyethylene), TPE, and countless other polymers as internal and exterior lubricants. Process oils are frequently used in polymers, a key component of plastics. PlasticsEurope (PEMRG) reports that between 1950 and 2020, the yearly global production of plastics expanded dramatically. In contrast to 1950, when output was only 1.5 million metric tons, 2020 production statistics were 367 million metric tons. Due to the considerations above, the expanding polymer sector is projected to act as a market driver throughout the forecast period.

Global Process Oils Market Restraint:

Fluctuating Price of Crude Oil

Crude oil is refined via the distillation process to produce process oils. While heavy distillates are used to create base oils and processing oils, light distillates of crude oil are treated and refined to develop goods like gasoline and diesel. Therefore, changes in the price of crude oil harm the companies' ability to turn a profit. Low margins for their producers and distributors result from fierce competition in the process oil industry and unpredictable crude oil prices. As a result, the process oil market will face obstacles to expansion due to the shifting price of crude oil.

Global Process Oils Market Opportunities:

Application in the Production of Rubber

Petroleum is used to make rubber process oil after the volatile heating oil and gasoline fractions are separated using the distillation method. Rubber bands, toys, and tires are just a few made from rubber produced commercially using natural and synthetic process oils. As they improve the flow properties of the compound and facilitate the dispersion of fillers, they are also used in the rubber compounds' mixing process. The usage of rubber process oils is being encouraged by the growth of the worldwide rubber industry in a variety of application fields. Rubber is frequently used in tires, building supplies, white goods, biomedical devices, and textiles, among other things.

Regional Analysis

Asia-Pacific Dominates the Global Market

The global process oils market is bifurcated into four regions: North America, Europe, Asia-Pacific, and LAMEA. 

Asia-Pacific is the most significant revenue contributor and is expected to grow at a CAGR of 2.81% during the forecast period. Production of adhesives makes substantial use of process oils. Market players are making significant investments which are expected to drive market growth over the forecast period. For instance, DuPont agreed to contribute roughly USD 30 million to the development of a new manufacturing plant in Zhangjiagang, Jiangsu Province, East China. The plant is anticipated to be operational by early 2023, and construction started in Q3 2021. The company's new plant will create adhesives for clients in the transportation sector, primarily supporting two major industry trends: applications for vehicle electrification and lightweight, projected to increase demand for process oils. Additionally, the increase in vehicle manufacturing in China will likely increase demand for tires and other automotive parts, which will probably be suitable for items made from processed oil. One of the biggest producers of rubber parts in China. Although the production of automobiles is adversely affected, the demand for process oils is projected to be boosted by the manufacturing of a wide range of rubber goods used in several industrial applications, including mining, construction, power generation, paper and printing, and medical. The need for process oils is projected to increase due to China's rapid industrialization, increasing the demand for routine rubber product replacement.

Furthermore, it is anticipated that growing worries about the health and safety of workers would increase demand for safety gear such as belts, shoes, and gloves. The coexistence of the rubber-producing sector and the quickly expanding rubber product manufacturing and consumption sector is demonstrated by the Indian rubber industry. Positive institutional agency interventions that promote import substitution and self-sufficiency support the nation's rubber sector. Most rubber goods, including tires, are a mixture of natural and synthetic rubber. With a capacity of about 900,000 tons, the nation ranks as the sixth-largest producer of natural rubber worldwide. In addition, 338,189 tons of synthetic rubber were imported in 2017–18, and it's anticipated that 1.2 million tons will be consumed by the end of 2025.

Europe is expected to grow at a CAGR of 2.17% during the forecast period. Germany's tire market has been experiencing stagnation for a while. In reaction to market shifts in Europe that favor larger rim-diameter tires, the leading players in the tire business are expanding and decreasing in Germany at the same time. The tire manufacturing disruptions will probably immediately affect the market under investigation. Leading tire manufacturer MICHELIN revealed in September 2019 that they intended to close a Hallstadt plant that produced 16-inch passenger car tires. However, MICHELIN began producing larger rim-size tires (18 and 19-inch tires) at its Bad Kreuznach, Germany, plant in September 2019. Around 300 paint and printing ink producers, many of them small and medium-sized businesses, are located in Germany, which is projected to result in a growth in the need for process oils used in the production of printing inks and other products. One of Europe's top countries for producing upscale footwear is France. Leather is the primary material used in the country's footwear industry. The nation's luxury and fashion industries have a significant negative impact on the use of natural rubber in the manufacture of footwear. Additionally, the temporary suspension of supply chain and production operations has harmed the expansion of the industrial sector. Over the forecast period, the growth of the process oils market is anticipated to be constrained by the relatively low demand for rubber products from the industrial sector.

The U.S. is a significant user of tires and rubber, and the rubber sector in the region has expanded over time. The nation also manufactures a variety of specialized rubber chemicals. Introducing electric vehicles to the market and reducing tariffs are expected to increase the demand for rubber tires in the United States. There are roughly 47 tire manufacturing facilities in the US, with a daily production capacity of 760,06k units. These production facilities may make tires and passenger automobiles, light trucks, and trucks. Some of the largest tire manufacturers in the world, including Goodyear Tire & Rubber Co., Cooper Tire & Rubber Co., Michelin, and Bridgestone Americas Tire Operations (over 70% of the market share is reported with these four companies), are based in the United States, which represents one of the largest and most developed tire markets in the world. The size of the US rubber sector has increased dramatically over time. 

In addition to being a big producer and consumer of rubber, the nation continues to be a key force in the market, and this trend is anticipated to continue in the years to come. Canada's rubber industry provides industrial and automotive markets with rubber goods. The automotive industry uses rubber goods such as tires, hoses, belts, weatherstripping, air dams and deflectors, gaskets, doors, windows, and closure seals. This industry dominates the market. Conveyor belts, for example, are needed in other markets for consumer goods and forestry and mining operations.

Brazil is one of the world’s top nations for the production of tires and is also one of the leading rubber producers in the region. It is home to some of the largest tire producers, including Sociedade Michelin de Participacoes Industria e Comercio Ltda, Bridgestone do Brasil Industria e Comercio Ltda, Compania Goodyear do Brasil Productos de Borracha Ltd, Continental AG, Grupo Industria Brasil Ltda, Pirelli Pneus Ltda, and others. Argentina's economy has been moving slowly over the past few years due to the inconsistent domestic policy framework, falling commodity prices, sluggish foreign demand, and the depreciation of the peso (ARS) (Argentine peso). In contrast, due to the new liberalization agenda, trade- and investment-friendly policies are anticipated to help the Argentine economy in the medium and long term. The nation's need for rubber is rising, driven primarily by the tire manufacturing industry. The country's increasing tire manufacturing businesses have increased the demand for rubber process oils. They are increasing the need for processed oils as a result.

Segmental Analysis

The global process oils market is segmented by type and application.

Based on type, the global process oils market is bifurcated into aromatic, paraffinic, and naphthenic. 

The naphthenic segment is the highest contributor to the market and is estimated to grow at a CAGR of 2.50% during the forecast period. Cycloparaffins, or naphthenes, are a subclass of hydrocarbons. The naphthenic rubber process oil has a stable structure because it is a single bond. The naphthenic process oils have great qualities like high compatibility with synthetic elastomers. They are light in color and non-staining substances. Compared to paraffinic oils, they have a higher solvating power. They also have low viscosity and exhibit exceptional stability at high temperatures. The product's advantages in terms of stability and solubility have boosted its demand across various applications, fueling it during the forecast.

Straight connected or branching chains of hydrocarbon molecules with either a high, medium, or low viscosity make up paraffinic rubber process oil. The length of the chain lengthens, increasing the oil's viscosity. These materials are widely utilized in ethylene-propylene rubbers because they are more stable and have the highest flash point for the specified viscosity. The product demonstrates excellent light stability and ozone resistance compared to aromatic rubber oil and naphthenic rubber oil. The characteristics above of paraffinic rubber oil improve rubber goods' processing efficiency and elastic qualities. Additionally, it raises vulcanizates' tensile strength. Low heat is produced during the procedures by the paraffinic rubber process oil. The product has poor low-temperature performance, emulsification, and compatibility. Additionally, rubber products that have added paraffin-based rubber oil cure slowly.

Based on application, the global process oils market is bifurcated into rubber, polymers, personal care, textile, and other applications. 

The rubber segment owns the highest market and is estimated to grow at a CAGR of 1.45% during the forecast period. Petroleum is used to make rubber process oil after more volatile gasoline and heating oil fractions are separated using the distillation process. It is a blend of various molecular weights of aromatic, naphthenic, and paraffinic substances. It is used in the rubber industry to increase the amount of rubber and cut prices to make rubbers and rubber compounds easier to process. It facilitates the blending of rubber compositions and serves as an internal lubricant.

Furthermore, it makes it easier to incorporate additives and fillers, enhances some physical properties, and serves as a cheap extender. Commercially, rubber bands, toys, tires, and other rubber products are produced using natural and synthetic process oils. It aids in enhancing the dispersion of fillers and the flow properties of the compound during the mixing of rubber compounds. Furthermore, rubber process oils improve electrical conductivity and flame resistance. Rubber process oil is being utilized more and more in products like rubber sheets, tires, tubes, and other items. The global expansion of the rubber industry in various application fields encourages the use of rubber process oils. Tires, the automotive supply sector, construction, white goods, biomedical, and textile applications are a few common uses for rubber.

A significant portion of the production of polymer compounds involves process oil, and a fitting process oil is critical because compounded polymers frequently comprise 20 to 50% of process oils. The performance parameters in terms of strength, hardness, and long-term stability when exposed to sunlight are impacted by selecting the incorrect process oil for polymer compounding. The performance and compatibility with the polymers are affected by the process oil's role as an extender oil. Superior rubber softness, color stability, and elasticity are further benefits of this. Process oil is increasingly employed as a pigment-dispersing agent, extender oil, plasticizing agent, catalyst carrier, and mold-releasing agent. Due to their better qualities, such as cost effectiveness, low weight, and outstanding performance, polymers are being employed more and more as a replacement for metals and products made from minerals. Due to the increasing need for food packaging materials, polymers are becoming more and more popular in the food and beverage industry.

Additionally, polymers make it simple to shape products, have exceptional resistance to physical stress, and offer tremendous flexibility in packaging. In addition, polymers are employed in producing goods in the agricultural, toy, and fashion industries. Process oils are used in the production of polymer compounds. Thus, it is projected that increasing polymer demand across the industries mentioned above will drive the rise of process oils throughout the projection period.

Recent Developments

• August 2022- Cross Oil Refining & Marketing, Inc. (“Cross Oil”) and Process Oils, Inc., an Ergon company (“Process Oils”), entered into an offtake and marketing agreement effective August 23, 2022, through which Process Oils will serve as the exclusive marketer and seller of Cross Oil’s Corsol®, L-Series, B-Series, CrossTrans®, and Ebonite® oils produced from Martin Operating Partnership L.P.’s Smackover, Arkansas, refinery.
• November 2022- Chevron unveiled additional environmentally acceptable lubricants for Marine Vessels.s