Demand for white oil in the Asia-Pacific region is greater than in any other region, as China is emerging as the largest consumer of the basic oil-related product, while India remains the main market, an industry information firm said.

In 2015, global consumption of white oil was about 1.6 million to 1.7 million metric tons, an official with U.S. consulting firm Kline & Co. noted in a webinar last week. From 2011 to last year, the compound annual growth rate was about 1.5%, and it is expected to remain at that rate through 2020, resulting in 1.7 million to 1.8 million metric tons. Over the next five years, Asia is expected to continue to dominate demand.

Vaseline oil is one of the major uses of white oil.

Last year 62% of the demand came from Asia Pacific, with North America as the second largest consumer region and Europe third. Of the major markets of China, India, North America, Europe and Brazil (together about 1.5 million tons), China accounted for about 40% and India was about equal to Europe - both slightly less than North America's share of about 20%.

White oils are used in a wide range of applications in cosmetics and plastics - both together accounting for half of the market - as well as in textiles, adhesives, pharmaceuticals and other industries. The food industry uses white oils as mold release agents, which constitute food-grade lubricants. Other applications include textiles, agricultural sprays, fertilizers and defoamers.

All grades of base oils are used in the production of white oils, with the use of different grades largely dependent on regional availability.API Group II and Group II+ are used in the vast majority of white oil production, with Group I being the second most important grade. Naphthenes take third place, while Group III products are used the least. “Group II base oils are the preferred choice for high-quality pharmaceutical-grade white oils in North America and Asia,” explains Sushmita Dutta, program director, Kline Energy, ”The demand for high-purity, pharmaceutical-grade white oils is much greater than the demand for technical-grade white oils. ”

In key markets, including India and China, the low-viscosity category accounts for about half of the demand for white oil feedstock. The high-viscosity category accounts for about one-third of demand, with the remainder in the medium-viscosity category.

Six larger suppliers account for more than 60% of the market share, Dutta said, adding that “the white oil market in the major countries is highly harmonized, with the top four suppliers in each country and region accounting for more than 75% of the market share.”

Although white oil consumption will grow at a slow and moderate rate over the next five years, Kline said it remains an attractive market due to its large volume and the fact that it can be produced using processes that are not highly technical.

However, approvals can be difficult. “Because of the lengthy approval process, there will be moderate to high barriers to entry, especially in the personal care, pharmaceutical and food processing industries,” where it is in highest demand.