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The global industrial gases market size was USD 88.05 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with industrial gases witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the market exhibited a negative growth rate of 8.7% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 91.29 billion in 2021 to USD 148.16 billion in 2028 at a CAGR of 7.2% in the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Oxygen, hydrogen, carbon dioxide, and nitrogen are the most common gases used in industries. These gases are distributed to end-use industries in both liquefied, as well as gaseous forms through gas tankers. These gases are generally produced from cryogenic filtration of air through air separation units. Depending on their application in different industries, they are also known as medical gases, fuel gases, refrigerant gases, and specialty gases.
The growing demand from major end-use industries, such as oil and gas, chemicals, petrochemicals, food and beverage, and power has contributed to the growth of the market. The increasing production of low sulfur, clean-burning fuels requires a massive amount of hydrogen for the hydrotreating of petroleum distillates which is driving the demand for merchant supplies. The rising popularity of electronic devices throughout the world and the surging demand for renewables are projected to offer opportunities for market growth.
Decreasing Demand for Gas Owing to National Lockdowns Has Harmed the Market Growth
The global health emergency caused by the sudden spread of the COVID-19 pandemic had led to a negative impact on every industry. The loss in operational time owing to the unavailability of laborers and lower demand from end-use sectors due to nationwide lockdowns to curb the reach of the virus has brought down the investment that was made for gases in the financial year 2020. The outbreak of the disease has also altered the demand for crude oil in a very severe manner which has even led to oil prices reaching a record low level.
For example, the cost of per barrel oil dropped to USD 20.37 in May 2020. It is the lowest level since February 2002. This low-demand phase, halt in operations, and travel restrictions across nations have led to the disruption in production in many industries. This has directly led to a decrease in the demand for various gases across different end-use sectors.
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Increasing Application of Industrial Gases in Oil & Gas Industry is a Current Trend
The rising global crude oil demand and the need for refining have increased the demand for gases in the global market. Industrial gases are used in the oil & gas industry at a large scale for upstream & downstream applications, such as drilling, well lifting, coiled tubing, pipe inerting and cooling, leak testing, inspection, maintenance, subsea works, spool base for pipe building, shipbuilding, subsea structure, offshore vessels, catering services, gas analysis, firefighting, compositional analysis, sulfur compounds, and other applications. Expansion of the oil & gas industry would leverage the demand for these gases for various applications which would further drive the market growth.
Increasing Urbanization & Industrialization and Growing Application of Gases are Prominent Trends
Various emerging and developed nations have observed steep increases in the rate of urbanization and industrialization shaping the industrial gases market trends over the forecast period. Rapid expansion in the setup of new facilities such as manufacturing and processing industries as a result of urbanization is likely to favor this market. For example, as per the data published by the World Bank, various leading nations including Italy, India, China, and Vietnam hold around 71%, 34%, 60%, and 37%, respectively, of their population living in urban localities by the end of 2019. Further, the expansion of the application sector will boost the demand for these gases.
Increasing Investment in Manufacturing and Processing Industries to Fuel Market Growth
Growing public and private funding to explore new horizons across numerous industrial verticals such as metallurgy, food & beverage, and mining & metal, especially across the developing nations is projected to add to the global industrial gas market size. For example, in June 2020, the United Nations Conference on Trade and Development (UNCTAD) published the World Investment Report 2020 stating that the total
foreign direct investment (FDI) inflow across the Asia Pacific totaled at about USD 474 billion accounting for over 30% of the global FDI movement in 2019. The organization further reported that countries such as China, India, and other Southeast Asian nations including Singapore and Malaysia are set to be among the leading economies in the region attracting new investment opportunities.
Significant Growth in Food and Beverages and Healthcare Industry to Fuel the Industrial Gases Market Growth
The growing investment in the food and beverages & healthcare sector would propel the demand for gases during the forecast period. As per the Germany Trade & Invest report, Europe is the largest food producer and Germany stands the fourth-largest food and beverages industry. The country is also the third-largest exporter of food and beverages, where exports of processed foods and agricultural commodities have generated sales of USD 84.31 billion in 2018. This trend is expected to be continued during the forecasted period which would increase the demand for several gases used in the food & beverages industry.
The healthcare sector is also expanding at a faster rate across the globe owing to the increasing investment in the medical industry. According to the Forbes report, digital health investments had increased up to USD 6.5 billion in 2017, which is up by 109% compared to the previous year.
Stringent Laws and Regulations for Manufacturing, Storage, and Distribution of Gases to Restraint Growth
Stringent laws and regulations related to the manufacturing, storage, and transportation of gases are likely to restrain the market growth during the projected period. According to the EU Regulation 231/2012, the composition of hydrocarbons was specified for the storage and distribution of industrial gases. The transportation of these gases was bonded under the European Agreement on the Carriage of Dangerous Goods by Road, ADR 13 regulation for safety measures.
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Oxygen Segment to Dominate Backed by Surging Usage in Flame Hardening
Based on the gas type, the market is segmented into oxygen, nitrogen, carbon dioxide, hydrogen, argon, and others. The oxygen segment is dominating the market owing to its wide application in oxygen scarfing, gas welding, gas cutting, flame cleaning, flame straightening, and flame hardening. It is mostly used in various industries, such as chemicals, pharmaceuticals and petroleum, pulp and paper manufacturing, health care, glass, and ceramics industry, among others.
Nitrogen holds the second-largest market share owing to its chemical property of being slightly lighter than air and slightly soluble in water. It is used in a wide range of industries, such as chemicals, pharmaceuticals, glass and ceramic, petroleum processing, steelmaking, and other metals refining industries.
The carbon dioxide segment is also set to generate more market share, as it is used as a raw material for the production of various chemicals such as for carbonation of soft drinks, fire extinguishing systems, for freezing of food products such as poultry, vegetables, fruits, and meats. The hydrogen and argon segments are also expected to exhibit a high market share, as they have various applications, including shield gas in TIG welding in the manufacturing and processing, and metallurgy industry.
Cryogenic Segment to Remain Dominant in the Market in the Upcoming Years
In terms of application, the market is segmented into packaging, coolant, carbonation, cryogenic, cutting & welding, laboratory, and air separation. The cryogenic segment is dominating the market owing to its wide applications. It is mainly used to produce cryogenic fuels, such as liquid hydrogen and liquid oxygen for rockets and spacecraft applications. The packaging segment is also set to grow steadily owing to changing lifestyles and the rising demand for packaged food products from the food and beverage industry. The expanding process industry, which drives the need for coolant applications from the petrochemical, chemical, energy, food, and pharmaceutical industries, would propel the growth of the coolant segment in the upcoming years.
Carbonation is carried out either in industries where beverages are processed and bottled or on-site at places of consumption, such as bars and fast-food restaurants, which are increasing at a significant rate. It would drive the carbonation segment during the projected period. The air separation segment is also likely to showcase a considerable market share owing to its wide applications in the metallurgy and healthcare sector. The cutting & welding, laboratory, and other application sectors are also expected to witness high demand for various gases which will, in turn, drive the growth of this market.
Healthcare Segment to Lead the Market in the Forecast Period
In terms of end-users, the market is segmented into healthcare, food and beverage, oil & gas, chemical, power, metallurgy, electronics, mining, pulp and paper, water treatment, and other segments. The healthcare sector is the leading and the fastest-growing segment owing to its wide applications, such as usage of nitrogen to preserve vital blood and tissue, helium for MRIs, and oxygen and respiratory gases to breathe. The growing trend of consuming packaged food and increasing investment in the food and beverage industry would propel market growth. Specialty gases help to produce advanced lighting and insulation materials, as well as photovoltaic cells, which are further used in solar energy panels. Hence, the increasing demand for renewable energy is anticipated to propel the demand for these gases.
The chemical industry is also set to exhibit more market share owing to the wide application of oxygen, hydrogen, carbon dioxide, methane, and other gases for chemical processes. The oil & gas industry is also likely to showcase a high market share as liquid nitrogen and carbon dioxide are used to produce conventional and unconventional hydrocarbons. These gases are used for processes such as hydraulic fracturing, coiled tubing, completion, drill stem testing, pressure testing, stuck drill pipe, and other processes in the oil & gas industry.
The metallurgy industry would also augment the market growth owing to the increasing welding applications such as welding processes, metal arc welding, flame cleaning, gas welding, gas cutting, oxygen scarfing, flame hardening, flame straightening, and gas tungsten arc welding. The electronics, mining, pulp & paper segment, and other segments, which include automotive, utilities, construction, and plastic & recycling segment, would drive the market during the forecast period.
Asia Pacific Industrial Gases Market Size, 2020 (USD Billion)
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The market is segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa. The global market is anticipated to gain momentum in the Asia Pacific owing to the increasing urbanization and industrialization, coupled with the rising application of gases in various end-use industries such as metallurgy, healthcare, food and beverage, oil & gas, and power. Emerging economies, namely, China, India, Japan, and Indonesia, among others, are looking forward to investing in sustainable energy development. Several companies are also investing in these countries due to the presence of an enormous consumer base.
The healthcare and food & beverages industries in Europe are expanding at a healthy rate, which drives the demand for the various gases. The industrial sector is expected to showcase a high demand for gases in the projected period. There is a significant growth in the demand for these gases in the pharmaceutical and metallurgy industries, which, in turn, would drive the market. North America is holding the second-largest market share owing to the increasing application of gases in the oil & gas and healthcare industry. Besides, the expansion of the chemical industry would also propel the regional market.
Various nations across the Middle East and Africa have observed a significant number of hydrocarbon exploration & production activities from key oil & gas ventures, requiring a substantial amount of specialty gases and nitrogen gas for drilling and completion work. It would further increase the demand for the gases such as hydrogen. The increasing rate of urbanization and industrialization in Latin America and the growing food and beverage industry would also augment the regional landscape.
Key Players Focus on Investment Strategy to Gain a Competitive Edge
Different small and large players present across the competitive landscape have experienced substantial investment in the healthcare and pharmaceutical industries, driving the potential for the industry expansion. The improving economic scenario and growing metal processing and manufacturing industries, which include oil & gas, chemical, food and beverages, and transportation are set to drive the growth of the market. Established customer base and supply chains are some of the key parameters contributing to the dominance of certain players in the market such as Linde, Air Products, and Air Liquide.
However, numerous participants operating at the national and regional levels, such as Bombay Oxygen Corporation Limited, SICGIL India Limited, Yateem Oxygen, Goyal MG Gases Pvt. Ltd., and many others are continuously striving to provide various gases to fortify their position across the regions. New initiatives by many such organizations to deliver different gases in an optimized procedure is likely to favor the growth in their market shares and thereby propelling the global industrial gases industry size.
An Infographic Representation of Industrial Gases Market
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The global industrial gases market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, products, and upcoming developments of the product. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD Billion)
By Gas Type; By Application; By End-User; and By Geography
By Gas Type
By End User
Fortune Business Insights says that the global market size was USD 88.05 billion in 2020.
The global market is projected to reach USD 148.16 billion in 2028.
Registering a CAGR of 7.2%, the market will exhibit steady growth in the forecast period (2021-2028).
The oxygen segment is expected to lead this market during the forecast period.
The increasing investment in manufacturing and processing industries and significant growth in the food and beverage and healthcare industries would drive the market. However, stringent laws and regulations for manufacturing, storage, and distribution of these industrial type of gases may restrain growth in the forecast period.
The market in the Asia-Pacific region stood at USD 28.31 billion in 2020.
Air Liquide, Air Products, and Linde are the top companies in the market.
Gases, such as oxygen, nitrogen, hydrogen, carbon dioxide, and argon are used for applications such as carbonation, cryogenic, cutting & welding, laboratory, welding, sewage treatment, and firefighting.
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