Heat Transfer Fluids Market

Heat Transfer Fluids Market Outlook - 2027

The global heat transfer fluids market was valued at $1.5 billion in 2019, and is projected to reach $2.0 billion by 2027, growing at a CAGR of 4.8% from 2020 to 2027.

COVID-19 pandemic across the globe has led to decrease in demand for heat transfer fluids as manufacturing activities across the globe has been halted amid lockdown, however, countries such as India and China are gradually lifting the lockdown to get back manufacturing sector to normal working conditions.

Heat transfer fluids (HTFs) are gases or liquids specifically manufactured for the purpose of transmitting heat from one system to another. These fluids are manufactured from highly refined petroleum, synthetically formulated hydrocarbons or siloxanes (silicone). They provide high temperatures at very low system pressures and also offer safety, low maintenance, and extended operating lifetimes as major benefits. This is estimated to subsequently affect the HTFs market.

HTFs are widely used in chemical, oil & gas, and renewable energy industries. In the chemical processing industry, heat transfer is required for indirect heating of process liquids and polymers, single fluid batch processing, pipeline tracing, energy recovering, low-pressure cogeneration, drying & heating of bulk materials, and gas processing. The rise in demand for chemicals from the automotive industry, energy & resources, construction, consumer goods, electronics, and health & nutrition has increased the production of chemicals, which resulted in rise in demand for heat transfer fluids from chemical manufacturers. In addition, heat transfer fluids are utilized in concentrated solar power (CSP) or solar energy generation and solar thermal storage, using concentrators such as parabolic trough-based systems. HTFs are used to collect heat energy and transport it to a power station for thermal storage as a renewable energy technology. Increase in demand for clean energy across the globe has led to set up various concentrated solar power plants across the globe. Governments of various developed and developing countries, such as the U.S., Spain, China, and India, have invested heavily to set up solar power plants to meet the growing energy requirements of their countries, thereby reducing the carbon footprints and dependency on fossil fuels to fulfill the energy requirement. This is expected to increase the demand for HTFs across the renewable energy industry. Furthermore, in the oil & gas industry, HTFs are used in offshore platforms and refineries for heating facilities and regenerating glycols to remove water from the natural gas produced and to heat reboilers & columns for the distillation of oil and oil-based products. Attributed to the surge in oil & gas exploration activities across the globe and increase in energy demand around the world, especially in developing economies, such as India and China, due to rapid industrialization and urbanization have led to increase in consumption of oil & gas. Therefore, this has resulted in growing consumption of heat transfer fluids from oil & gas processing companies. These factors are expected to drive the heat transfer fluids market growth during the forecast period.

However, factors, such as fire & explosion hazards posed by heat transfer fluids and volatility in raw material prices, are expected to hinder the growth of the heat transfer fluids market. In addition, energy scarcity and environmental safety regulations have surged the need for energy conservation. Moreover, the adoption of energy transfer devices, such as heat exchangers and heat pumps, has increased significantly. This is expected to provide lucrative opportunities for the heat transfer fluids market to grow in the near future.

The global heat transfer fluids market size is segmented on the basis of type, end-use industry, and region. On the basis of type, the market is categorized into mineral oils, synthetic fluids, glycols, and others. By end-use industry, it is divided into chemical, oil & gas, food & beverages, pharmaceutical, renewable energy, automotive, HVAC & refrigeration, and others. Region-wise, the heat transfer fluids market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

The major key players operating in the heat transfer fluids market include Indian Oil Corporation Ltd., Hindustan Petroleum Corporation Ltd., Eastman Chemical Company, The Dow Chemical Company, BP p.l.c, Clariant International Ltd., Royal Dutch Shell plc, Phillips 66, Chevron Corporation, and Exxon Mobil Corporation. Other players operating in this market include Lanxess, Paratherm, Clariant, Sasol, and Radco Industries. These major key players adopt different strategies, such as acquisition and product launch, to stay competitive in the global heat transfer fluids market.

Global Heat Transfer Fluids Market, By Region

Europe accounted for the major share in 2019 in the global heat transfer fluids market. This is due to rising population coupled with increasing energy demand has propelled the power and energy sector growth. Ongoing construction of new solar plants along with existing demand in industrial sectors including, automotive and metal processing is anticipated to drive the industry demand in the region.

Global Heat Transfer Fluids Market, By Type

The mineral oil segment accounted for the major share in 2019. Mineral oil is inexpensive in comparison to synthetic liquids as its initial cost is two to three times greater than the initial cost of mineral oil. There is loss of thermal fluid during the maintenance of a thermal heater, and it is expensive to replace the fluid back into the system. Even if the cost of replacing the fluid is higher, the cost of replacing mineral oil is much less than the cost associated with replacing a synthetic fluid. Furthermore, it is widely used in APAC and MEA regions where the focus is on the usage of low-cost products.

Global Heat Transfer Fluids Market, By End-Use Industry

Based on end-use industry, the chemical segment accounted for the major heat transfer fluids market share in 2019. The increase in demand for chemicals from automotive, energy & resources, construction, consumer goods, electronics, and health & nutrition industries has led to increased production of chemicals. This has resulted in rise in demand for heat transfer fluids from chemical manufacturers for indirect heating of process liquids & polymers, single fluid batch processing, pipeline tracing, energy recovering, low-pressure cogeneration, drying & heating of bulk materials, and gas processing.

COVID-19 Analysis:

According to the International Monetary Fund (IMF), due to the outbreak of novel coronavirus (COVID-19) pandemic, the global economy is expected to shrink by 3.0% in 2020. Many countries are under strict lockdown, which has forced several sectors to shut down their operations. This has halted manufacturing activities and reduced the demand for HTFs. 

According to the United Nations Industrial Development Organization (UNIDO), the Micro, Small & Medium Enterprises (MSME) sector across the developing economies, such as India, has been worst affected due to the COVID-19 outbreak and the lockdown imposed thereafter. This is expected to decline the demand for heat transfer fluids. In addition, in the second half of 2020, some countries have started to lift restrictions and gradually start business operations in various sectors. Even if the lockdown is being lifted, it is expected to be challenging for the manufacturing sector to get back to normal working conditions.

According to BASF SE, the global chemical production (excluding pharmaceuticals) is expected to grow by 1.2% in 2020, much slower than in 2019 due to the COVID-19 outbreak. A slight decline is expected to be witnessed in the advanced economies (2020: –0.8%, 2019: –0.9%) and growth below the prior-year level in the emerging markets (2020: +2.4%, 2019: +3.5%). In addition, China, the world’s largest chemical market, is expected to witness lower growth rate (2020: +3.0%, 2019: +4.7%). This is attributed to weaker final demand and production stoppages in customer industries, thereby having a significant negative impact on the chemical industry growth in China. Furthermore, in the European Union, chemical production is expected to decline during the forecast period due to the sharp drop in chemical production in the second half of 2019 as production levels at the year-end were below the annual average. In the U.S., chemical production is also expected to decline due to slowdown of the growth of customer industries such as automotive, energy & resources, construction, consumer goods, electronics, and health & nutrition. However, slight recovery in the growth of the agricultural sector and stabilization in the construction industry are expected to fuel the demand for chemicals. In Japan, the growth of the chemical market is expected to decline amid a weak domestic economy and the slowing regional environment. Therefore, these factors are expected to decline the demand for heat transfer fluids from the chemical processing industry of the developed economies.

In the oil & gas industry, heat transfer fluids are used in offshore platforms and refineries for heating facilities and regenerating glycols to remove water from the natural gas produced and to heat reboilers & columns for the distillation of oil and oil-based products. According to the bp Statistical Review of World Energy 2020, in 2019, the global production of crude oil and condensate was 83,182.0 thousand of barrels per day compared to 83,764 thousands of barrels per day in 2018, thereby registering a growth rate of 1.0%. In addition, in 2019, the global production of natural gas was 3989.3 billion cubic meters compared to 3857.5 billion cubic meters in 2018, thereby registering a growth rate of 2.4%. However, in 2020, due to the pandemic, the production of crude oil and natural gas has been slow, owing to the downfall in consumption of oil & gas and related products. Therefore, attributed to this factor, the demand for heat transfer fluids across the oil & processing industry has declined, which is expected to affect the growth of the market in near future.

In the automotive industry, heat transfer fluids are used as a heat-dissipating coolant fluid in the radiator systems used in automotive engines. The automotive industry has been severely affected amid lockdown imposed due to the COVID-19 outbreak. Automotive manufacturers have halted their production activities due to disrupted supply chain of automotive components and fall in demand for passenger vehicles across the globe. The decline in production of passenger vehicles and downfall in numbers of newly registered vehicles are anticipated to decrease the demand for HTFs and affect the growth of the market during the forecast period.

In concentrated solar power (CSP) and solar thermal storage, heat transfer fluids are used to collect heat energy and transport it to a power station for thermal storage as a renewable energy technology. However, people are advised to stay and work from home to prevent the transmission of coronavirus. Therefore, the demand for power has surged significantly, owing to governments of various countries across the globe not only relaying on the conventional energy sources but also investing heavily on setting up of new CSP plants to meet the growing energy demand. Furthermore, the demand for HTFs is anticipated to surge during the forecast period.

In the HVAC and refrigeration industry, HTFs are used as coolant. However, large-scale projects in hotels, resorts, office buildings, restaurants, shopping malls, and entertainment facilities have been slowed down due to the pandemic. As a result, sales of commercial air conditioners, such as packaged air conditioners and variable refrigerant flow (VRF) air conditioners, have been declined. Therefore, this has declined the demand for HTFs from the HVAC and refrigeration industry, and is expected to negatively impact the market growth in near future.

Key benefits for stakeholders

• The heat transfer fluids market analysis covers in-depth information of major industry participants.
• Porter’s five forces analysis helps analyze the potential of buyers & suppliers and the competitive scenario of the industry for strategy building.
• Major countries have been mapped according to their individual revenue contribution to the regional market.
• The report provides in-depth analysis of the heat transfer fluids market forecast for the period 2020-2027.
• The report outlines the current heat transfer fluids market trends and future scenario of the global heat transfer fluids market from 2019 to 2027 to understand the prevailing opportunities and potential investment pockets. 
• Key drivers, restraints, & opportunities and their detailed impact analysis are explained in the study.

 Heat Transfer Fluids Market Report Highlights