US Industrial Gas Demand to Reach $23.5 Billion in 2013

Total industrial gas demand in the US, including some captive consumption, is forecast to increase 4.9 percent annually to 7.5 trillion cubic feet in 2013, valued at $23.5 billion.  Two factors nurture demand and growth in industrial gas markets:  the steady and ongoing development of new products and technologies that increase demand for industrial gases; and a high degree of stability in markets such as food and beverage processing and healthcare. Industrial gases are essential to the markets they serve, and although their demand is subject to the cyclical nature of individual markets, the diversity of industrial gas applications mitigates the effects of cyclicality in any single business sector.  These and other trends, including market share and product segmentation, are presented in Industrial Gases, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

The petroleum and natural gas industry is by far the largest market for industrial gases in the US, accounting for 65 percent of total gas demand by volume and 60 percent by value in 2008, including huge quantities of captive hydrogen.  Demand for hydrogen in the petroleum refining industry represents the largest growth opportunity for industrial gas suppliers in the US for the coming decade. Refiners are mandated to produce cleaner-burning fuels from increasingly impure crude oil, a process requiring massive amounts of hydrogen. Captive hydrogen production accounted for 77 percent of refiners’ needs in 2008, but future increases in hydrogen demand will come primarily from merchant suppliers. Demand for industrial gas in the petroleum and natural gas production segment will grow 4.3 percent annually through 2013, due to the increased use of nitrogen and carbon dioxide for enhanced oil recovery projects.

Hydrogen is the most-consumed industrial gas in the US, followed by nitrogen and oxygen.  These three gases combine for 95 percent of industrial gas demand by volume.  The petroleum and natural gas industry dominates hydrogen and nitrogen consumption.  The chemical and metal processing industries account for most oxygen demand and are both significant consumers of nitrogen as well. Carbon dioxide demand is dominated by the food and beverage processing industries.  Argon, helium and acetylene are low volume, high value gases, demand for which is dominated by the metal processing and chemical processing industries.  The electronics, food and beverage processing, and healthcare industries together accounted for six percent of total gas demand by volume in 2008.  Though relatively small, the healthcare market will experience the most rapid growth of these three markets -- the result of growing oxygen demand for respiratory therapies.

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.