The vast application areas of industrial gases, ranging from healthcare to food processing industries and oil & gas and petrochemicals to metal processing industries, are creating a significant demand for these gases, globally. Further, rising demand for products from manufacturing industries, due to the increasing population and people per capita income, is also boosting the demand for industrial gases. Owing to such factors, the market for industrial gases is projected to demonstrate a CAGR of 5.5% during the forecast period (2020–2030), in order to generate $154,079.5 million revenue by 2030.
The COVID-19 has created an adverse impact on the global economy and industrial gases market. Since the global manufacturing companies were shut down, due to implementation of lockdown in several countries during the first and second quarter of 2020, resulted to very low or no demand for industrial gases. However, the demand from industries, like healthcare and food processing, has increased in the light of COVID-19, due to the increasing number of patients in current circumstances and rising packaged food preference among consumers, in order to curtail the spread of the disease.
Hydrogen Category to Retain its Position during Forecast Period
The industrial gases market, based on type, is categorized into hydrogen, oxygen, carbon dioxide, nitrogen, helium, argon, and acetylene. Among these, the hydrogen category generated the largest market share, both in terms of value and volume, in 2019, and is expected to retain its position during the forecast period, owing to its high usage in the chemical industry for the production of several products, such as ammonia. It is also used in the oil-refining industry to remove sulfur from fuels.
Further, it is considered as a future fuel, owing to its numerous potential applications, such as hydrogen fuel cell powered vehicles. In addition, as per the International Energy Agency, in power generation application, hydrogen is one of the leading options for storing renewable energy, and hydrogen and ammonia can be used in gas turbines to increase power system flexibility. Owing to such advantages, high investment is going on in hydrogen-based technologies, which is expected to increase the demand for hydrogen during the forecast period.
The industrial gases market, on the basis of delivery, is categorized into bulk container, cylinder, and on-site generation. Among these, the on-site generation category is expected to showcase the fastest growth during the forecast period. This can be attributed to the less intricate transportation of gases to end customers and its low cost, as compared to bulk container and cylinder delivery methods. Further, it helps in companies’ operations, as it eliminates risks associated with supply chain.
The industrial gases market, based on end user, is categorized into oil & gas and petrochemical, chemical, food processing, healthcare, electronics, metal processing, and others. Among these, the oil & gas and petrochemical category generated the highest demand for industrial gases. Industrial gases find applications starting from exploration and production of crude oil and natural gas, till refining of these oil and gases, in order to produce petrol, diesel, and lubricant, among others.
Further, increasing demand for refining products, including lubricants, among emerging economies, such as China, India, and Brazil, leads to increase the capacity of refining companies. As a result of which, the demand for industrial gases increases, in order to fulfil the demand for refining products.
Geographically, the industrial gases market in APAC is expected to witness the highest growth in the foreseeable future, on account of growing manufacturing industry and increasing healthcare expenditure in regional countries. Further, rising population in the region that certainly leads to more requirement of end-use products, which provides fuel to the growth engine of the regional market.
Players Adopted Mergers and Acquisitions to Capture Larger Market Share
Key players involved in the industrial gases market are using the model of mergers and acquisitions, in order to increase their respective market share. For instance, in October 2019, Air Liquide SA completed the acquisition of Southern Industrial Gases Sdn. Bhd. This move helps Air Liquide SA to established its footprint more strongly than before in the Malaysian industrial gases market.
In October 2018, Linde AG and Praxair Inc. successfully completed their merger to form Linde Plc, to strengthen its presence in industrial gases market across the world. The business combination reported annual revenue generation of $29 billion and market value of $70 billion of Linde Plc.
Some of the key players operating in the global industrial gases market are Air Products and Chemicals Inc., Air Liquide SA, Linde Plc, Taiyo Nippon Sanso Corporation, SOL SpA, Showa Denko K.K., Messer Group GmbH, India Glycols Limited, BASF SE, Yateem Oxygen, Buzwair Industrial Gases Factories, Dubai Industrial Gases.