Download Report IHS CEH Report : Air Separation Gases (Chemical Economics Handbook 2019)
PDF by S&P Global Commodity Insights; IHS Markit
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Format: PDF Language: English Pages: 359 Publisher: S&P Global Commodity Insights; IHS Markit Publitshion date: 2019 ISBN: 96938
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Description
The industrial gas industry has been at the forefront of consolidation for the past two decades and is now highly concentrated. The merger of Linde and Praxair saw the field being narrowed down to three major players—Air Products and Chemicals, Inc. (United States); L’Air Liquide, S.A. (France); and The Linde Group PLC (United Kingdom). Together, these companies supplied more than 60–70% of the industrial gases business.
Primary factors aiding the growth of industrial gases in recent years have typically been the growth in the Asian economy, high energy cost, and climate change initiatives. Increasing demand from the iron, steel, and chemical industries, as well as for gasification of coal and coke for clean energy, is expected to increase demand for industrial gases significantly after the current depression in the oil markets. With the developing world continuing to consume large quantities of steel to improve infrastructure, demand from those regions is positioned to grow at above-normal rates.
Primary factors aiding the growth of industrial gases in recent years have typically been the growth in the Asian economy, high energy cost, and climate change initiatives. Increasing demand from the iron, steel, and chemical industries, as well as for gasification of coal and coke for clean energy, is expected to increase demand for industrial gases significantly after the current depression in the oil markets. With the developing world continuing to consume large quantities of steel to improve infrastructure, demand from those regions is positioned to grow at above-normal rates. Major industrial gas companies have started to invest in technologies related to alternative energy projects. Improvement in the global economy and growth in Asia led to strong performance for the industrial gases business in recent years. The last few years saw the general markets underperforming and this has affected the industrial market directly. However, when global growth picks up, especially in Asia and Latin America, the industrial gases market is expected to revive its growth. Sectors that are increasing growth, albeit from a low base, are healthcare and biotech. Increased growth is also expected from the semiconductor industry, which is seeing its fab shift to 300 millimeters, and the rapid advancement in the photovoltaic technology.
The Chinese industrial gas market has almost doubled its value in the past few years. India and South Korea are also expected to double their consumption volumes in the next few years. Demand from petrochemical, chemical, and refining operations is making the Middle East a significant player. The emerging economies in Eastern Europe are also creating a major market, along with the major South American countries.
The industrial gas business tends to be influenced by regional factors, which can play a significant role in growth rates. For example, in areas where manufacturing or oil and gas extraction activity is high, corresponding consumption of industrial gases align with the trend. Population also plays an important part in defining growth. In countries such as China and India, the large population governs the increasing use of gases, especially in a relatively high growth environment.
The current market is being cautiously optimistic. Global GDP growth, which was growing at an average of around 3% during the past three years, is expected to cool down during the next few years, although not by much. Slower than expected production growth is expected to lower overall sales; however, areas such as food, beverages, and healthcare are expected to grow strongly. Most of the major gas companies have reported earnings declines due to manufacturing weakness coupled with currency impacts.
The growing chemicals manufacturing sector has led to increasing demand for industrial gases. Increasing application of gas blanketing and refinery use have also been contributing to the rise in use of industrial gases in these segments. Medical gases for health care and medical industry are also showing steady demand, especially in the Asia Pacific and Latin American regions. With the increasing application of liquefied gases such as LNG, there is rising demand for gases such as nitrogen. Consumption in the food industry is also picking up, where health-conscious consumers are demanding fewer additives and safer and fresher food products and where gases can be substituted for chemicals.
Optimization efforts and technology advancements to reduce energy consumption and energy costs have enabled capacities of single units to increase. Research and development investments are expected to increase following the consolidation phase for this industry.
All of the major industrial gas companies have undergone restructuring over the last two decades as they tried to improve operating and organizational efficiencies. In the past, industrial gas companies tended to be organized along product lines and form of delive
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