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How Is COVID-19 Pandemic Affecting Demand for Industrial Gases?

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Aryan Kumar
How Is COVID-19 Pandemic Affecting Demand for Industrial Gases?

With the continuous population growth and its migration to cities, manufacturing output is growing around the world. Considering how diverse the things made in factories are, the raw materials used to create them are equally diverse. One of the key raw materials used across industries is several types of gases, such as oxygen, hydrogen, nitrogen, carbon dioxide, acetylene, argon, and helium, either as ingredients in the intermediate or final products or to support various manufacturing processes.

Thus, with the growing manufacturing output, the industrial gases market revenue is set to reach $154,079.5 million by 2030 from $92,392.4 million in 2019, at a 5.5% CAGR during 2020–2030 (forecast period). Thus, seeing the widening scope for themselves, market players are entering into mergers and acquisitions to expand their portfolio, geographical reach, technical knowledge, and customer pool. For instance, in October 2018, Praxair Inc. and Linde AG merged to cumulatively increase their revenue. Similarly, Air Liquide S.A. acquired Baywater Healthcare Ireland Limited in June 2015 to grow its Irish home healthcare business.

Such moves are allowing the companies to better serve the oil & gas and petrochemical, food processing, chemical, healthcare, metal processing, electronics, and many other sectors. However, the ongoing COVID-19 pandemic has made most of these industries an insignificant source of revenue for them, as most of the manufacturing plants and commercial spaces around the globe have been shut down. On the contrary, the earnings of these companies from the food and beverage and healthcare industries have been either consistent or higher the last year than in 2019.

Due to the rising number of COVID-19 patients, the demand for ventilators and medical oxygen and other gases used for anesthetizing patients is surging, which is impacting the industrial gases market positively. Presently, India is witnessing a massive shortage of oxygen at hospitals, which is why scores of people are dying at once. Thus, efforts are being made on the national level to source oxygen not only from within but also from outside the country. For instance, Indian Railways has ferried more than 675 tankers, carrying over 10,300 metric tonnes (MT) of liquid medical oxygen, across the country till May 18, 2021.

Owing to all such factors, P&S Intelligence attributes the highest industrial gas consumption to Asia-Pacific (APAC), the region with the most people, highest production output, and largest transportation sector. In addition, China and India are two of the biggest producers of solar energy, with their 2020 installed capacity standing at 254,354.800 Megawatts (MW) and 39,211.158 MW, respectively, as per the International Renewable Energy Agency (IRENA). As a result, the demand for industrial gases will continue burgeoning in the region in the years to come.

Thus, with the growing industrial output, healthcare spending, and renewable energy production, the demand for various industrial gases will increase.

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