Refrigeration Oil Market Research Report - Global Forecast till 2030

Covid-19 Impact Analysis: Refrigeration Oil Market

Refrigeration oil is derived from either synthetic oil or mineral oil. It is formulated by mixing oil and additives designed for its use in cooling systems. The purpose of refrigeration oil is to lubricate moving parts in the refrigerant compressor effectively. The product finds use in numerous applications including refrigerators, freezers, automotive AC systems, air conditioners, and chiller among others.

The lockdown due to outbreak of COVID-19 impacted numerous end-use industries owing to disruptions in vendor operations, supply chain, and product commercialization. Additionally, closures of borders and export bans have led to a fluctuation in raw material prices and supplies. The covid-19 outbreak resulted in severe impact on the oil & gas industry, which, in turn affected the supply of raw materials such as naphthalene and paraffin used to produce mineral oil and thus, affected the refrigeration oil production.

The demand for refrigeration oil is primarily driven by the refrigerators and freezers used in various applications including food & beverage, medical, chemicals and plastic processing industries. The increase in consumption of frozen and packaged food products showed positive impact on the growth of refrigeration oil market amid covid-19 outbreak and is expected to witness healthy growth in the coming years. The demand for laboratory freezer used in production of biopharmaceuticals and organ transplant procedures coupled with rising government support for research activities and clinical trials is also likely to influence the growth of refrigeration oil market positively in the coming years.

The demand for refrigeration oil has been negatively impacted from the automotive and consumer electronics industries. The automakers across the globe are taking extreme measures in the form of plant closures to halt the spread of COVID-19. For instance, largest automotive players including Ford, Volkswagen, and Fiat Chrysler Automobiles N.V. (FCA) have shuttered most plants in March-April. In addition, decline in sales of consumer electronics resulted in decline in demand for refrigeration oil.

However, with the ease in lockdown and trade restrictions and government support, the demand for refrigeration oil from end-use industries is likely to gain impetus.