These players are investing substantially in research and development to launch new products and also to improve existing products. For example, in 2016, Nynas AB introduced two new products namely T22 that can be used in formulation of metal working fluids and Nytex 810 which is a heavy naphthenic tire oil.
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Most players in this market are resorting to the inorganic growth route by engaging in profitable partnerships and consistent efforts for expanding their product portfolio.
Prominent participants in the global naphthenic base oil market include Nynas AB, Royal Dutch Shell Plc., Calumet Specialty Products Partners L.P., Ergon LLC, and Chevron Corporation.
According to the report, the market which stood at US$1,640.4 mn in 2016 is projected to be worth US$2,605.7 mn by the end of 2025, at a CAGR of 5.3% between 2016 and 2025.
Based on viscosity index, amongst all, 35-60 SUS segment held more than 30% market share in 2016. The segment is anticipated to gain with the rising demand for transformer oil and process oil over the forecast period. Among the key application segments, process oil and electrical oil segments are likely to gain significantly over the forecast period owing to the rising demand for hybrid and electric vehicles.
Geography-wise, North America held a significant share in the global naphthenic base oil market in 2016 followed by Asia Pacific.
In recent years, naphthenic base oil has been gaining popularity due to its notable properties of high solvency, low wax, low pour point, and low aromatic content. Naphthenic base oils also known as pale oil are obtained by refining distillates of sweet crude oil at a pressure of 2500 psi by means of a hydro-treating multistage process. The low paraffin content and low aniline point characteristics of naphthenic base oil makes it ideal for applications that require high viscosity and high degree of solvency simultaneously. Due to this, naphthenic base oil is used in several formulations of gear oil, adhesives &sealants, process oil, plasticizers, and oil expender polymers which are used in various end-use industries such as automotive and industrial applications.
The rising demand for hybrid and electric vehicles due to reduce emissions is expected to increase the demand for process oil and electrical oil significantly in the upcoming years. Further, the favorable physical properties of naphthenic base oil is leading to its increased demand in metal working fluid application. The swell properties and superior low temperature performance of naphthenic base oils make them ideal for formulating hydraulic fluids and transmission fluids. Moreover, naphthenic oils respond well to antioxidants and additives due to high solvency attributes.
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Furthermore, rising investments by several governments in energy and power sector is fuelling demand for electrical oil, which is indirectly stoking demand for naphthenic base oil. For example, in 2016, the U.S. government announced investments worth US$1.5 million for design innovation of power grids with the objective to produce next generation of large power transformers.