Industrial gases are non-elemental gases that have low molecular weight. Industrial gases are manufactured for specific industrial operations and are in gas form at room temperatures. These are used in different industries in a variety of applications and therefore, the global industrial gas market is huge. Industrial gases are quite useful but the majority of these are flammable and not good for personal health. Industrial gases are a part of the chemical industry but as specialty chemicals.
Industrial Gases Market Analysis
The 4 industrial gases of Hydrogen (H2), Acetylene (C2H2), Methane (CH4), Oxygen (O2), are widely used in the majority of industries. Industries that produce everyday products use different types of industrial gases for aerosol cans, food processing, packaging, toys that use compressed gas, rubber, plastic, and home appliances. On the other hand, industries that cater to niche markets include automotive, cryogenics, welding/cutting, environment protection, laboratory, firefighting, instrumentation, aerospace, healthcare, paint, water treatment, semiconductors, etc. The applications of industrial gases in such a wide range of industries clearly show the penetration and the overall industrial gas market share.
The industrial gases market analysis suggests that the market is expected to grow with a Compound Annual Growth Rate (CAGR) of 7-8 percent until 2022. Such tremendous growth is due to the growth in large global economies such as the U.S. and China. In addition, cut-down in energy prices and operating costs are major reasons for such rapid growth. This is because the cost of energy production consists of almost 60 percent of the total cost of generation. The cost of production also varies according to the cost of energy production.
Industrial Gas Market Trends
The global industrial gas market is highly consolidated and it is controlled by only half a dozen companies including Air Liquide, Air Product, Yingde Gas, TNSC, Linde and Praxair. These companies dominate the industrial gas market with approximately 80 percent market share in total. The market is expected to grow even more due to emerging economies such as India and China, and the stabilized prices of oil and natural gas across the globe.
Market growth in this industry is particularly driven by prices and demand. The industry price drivers include purity, product customization, the volume of the product, and delivery location. The delivery of industrial gas is accomplished through a variety of mediums that include onsite processing, bulk deliveries, pipelines, and small packaging and delivery options such as gas cylinders. Industrial gas suppliers play an important role in this aspect as they aid companies by tracking shipments for better stock management and safety concerns.
Industrial Gas Market Global Outlook
Each aspect of the industrial gas industry has its own variables and those are also contributing factors in the overall growth. Onsite delivery is a preferred medium catering to a large number of industries. For instance, Praxair witnessed decent growth in its revenue share that went up from 34 percent to 35 percent in the recent past. Similarly, Linde improved its market share in the onsite business with new plants in Germany, Middle-East, Northern Europe, and Eastern Europe. In addition, Air Liquide also supplies its bulk and cylinders around its onside and/or pipeline business.
The industrial gas market is a niche market that caters to the majority of industries. Since economies in the developing regions are blooming, the industry can focus on expanding and generating more business opportunities in the near future.