The Growth of the Building & Construction Industry is the Key Determinant Propelling the Process Oil Market Growth

The growth of the Process Oil Market is primarily dependent on the growth of the building & construction industry. Process oils such as naphthenic, non-carcinogenic, aromatic and paraffinic are utilized in various chemical and technical industries, as a raw material component and as an aid to processing. The surging developments associated with the building & construction industry across the world have led to considerable growth in the process oil market. The process oil market size is projected to grow at a CAGR of 2.2% during the forecast period (2022-2027) and reach US$5.4 billion by 2027.

On the basis of the End-use industry, the Process Oil Market can be segmented into automotive, household, pharmaceutical & healthcare, agriculture, oil & gas, textile & apparel, building and construction and others. The building and construction industry is evaluated to be the leading segment in the process oil market in 2021. During the forecast period 2021-2027, the building and construction industry segment is expected to grow with a CAGR of 2.8%. This can be attributed to various reasons such as the utilization of process oils such as naphthenic, non-carcinogenic, aromatic and paraffinic as solvents in adhesives & sealants, paints and coatings, to increase the bonding between polymer matrix and fiber surface, in flooring materials and carrier fluid and in other applications. It is used to significantly reduce the porosity in renders, concrete and plasters, making them water repellent. The building and construction industry is growing, for instance, according to the U.S Department of Commerce, the privately-owned housing units authorized by building permits in March 2022 were around 1,873,000 which is 0.4% above February 2022 of 1,865,000 units and is 6.7% above March 2021 of around 1,755,000 units.

On the basis of geography, the Process Oil Market can be segmented into North America, South America, Europe, APAC and EMEA. According to IndustryARC’s analysis, Asia-Pacific has emerged as the most dominant region in the market. In 2021, the Asia-Pacific region held around 42% share of the total revenue earned by the market globally. Asia-Pacific countries including China, Japan and India are comparatively ahead in terms of the growth of the building and construction industry. According to Statistics of Japan, the number of construction contract orders went from 6,00,46,960 units in 2020 to 6,36,10,223 in 2021 and has witnessed a growth in 2021 (Jan-July) compared to 2020(Jan-July). The Process Oil market will also witness significant growth in the North American region. The U.S. and Canada are emerging as competitive countries in the process oil market.

Key companies holding major shares in the Process Oil Market are Royal Dutch Shell, Exxon Mobil Corporation, Indian Oil Corporation Ltd., Petroliam Nasional Berhad, Repsol, HPCL, Idemitsu Kosan Co., Ltd., Unipetrol, Panama Petrochem Ltd. and Nynas AB. The key strategies adopted by the companies include expansion and acquisition among others. In March 2022, the Board of Indian Oil Corporation Ltd (IOCL) approved the implementation of the Poly-Butadiene Rubber (PBR) project at IndianOil's Naphtha Cracker Complex at Panipat, Haryana, which is expected to be operational by 2025. Moreover, in November 2020, TotalEnergies acquired 33.3% interest of Tullow’s interests in the Uganda Lake Albert development project, including the East African Crude Oil Pipeline.