Product Code: 50922
The market for air separation unit is expected to grow approximately at a CAGR of 3.14% during the forecast period of 2020 - 2025. The major factors driving the growth include the increasing uptake of alternate energy sources such as large-scale gasification plants and oxygen-based gas-to-liquid, coal-to-liquid, and coal-to-chemicals plants and the increasing demand for industrial gases, spurred by the growth in steel and process industries. However, as the cost to supply high-purity industrial gases remains high, several operating companies shift towards alternate air separation techniques, such as pressure swing adsorption (PSA) as a cost-effective solution, which further restrains the market for air separation units
- The iron and steel industry is one of the major consumers of industrial gases, where inert and oxidizing gases are of paramount importance during the production of iron and steel. The increasing infrastructure development activities, particularly in China and India, have resulted in the growth of the iron and steel sector. This is anticipated to drive the air separation unit market, during the forecast period.
- Countries such as Saudi Arabia, UAE, and South Africa have been witnessing high growth rate of urbanization and industrialization activities and is expected to continue with the similar pattern, which is expected to offer growth opportunities for air separation units players, particularly from sectors, such as refinery, manufacturing, healthcare, electronics (solar PV wafers in particular), and food and beverages, among others. The Increase in Industrial Development Activities in Middle East & Africa presents a good market opportunity to air separation unit market players to expand their consumer base.
- Asia-Pacific accounted for the largest share of the global air separation unit market, attributed by the increasing demand for air separation units from the iron and steel, oil and gas, and chemical end-user segments.
Key Market Trends
Iron and Stell Industry to Dominate the Market
- The steel manufacturing industry is one of the largest consumers of industrial gases. These gases are essential for steel manufacturing processes, and steel manufactures require air separation units in the manufacturing plant to ensure the supply of these gasses. Oxygen, nitrogen, and argon find various applications in the steel industry.
- During 2011-2016, the steel prices dropped consistently with steep prices reaching the lowest in the decade in 2016. The drop in prices is attributed to slow increase in demand for, and overproduction of, steel. During 2016-17, the consumption of steel rose by 2.7%, and steel price also gained positive momentum.
- During the forecast period, the developing nations (excluding China) are expected to lead the growth in demand for steel. India is expected to be one of the biggest drivers for the steel demand during the forecast period.
- The developed nations, like the European Union member states and the United States, are expected to register a stable growth during the forecast period, in turn, further driving the demand for steel during the forecast period.
- As the steel industry is the largest consumer of industrial gases, the growth of the air separation unit market is highly dependent on the growth of this industry.
Asia-Pacific Driving the Market Demand
- Asia-Pacific accounted for the largest share of the global air separation unit market and is expected to continue its dominance during the forecast period as well.
- China is expected to lead the market in Asia-Pacific, due to its large domestic electronics manufacturing (like solar PV etc.) growth, increasing refining and petrochemical capacity, and increasing healthcare expenditure, which have significantly increased the demand for industrial gases.
- Since 2017, a number of companies have been expanding their capacities in China. Air Liquide has been especially active in signing new contracts in the country. For instance, the company had signed new supply air separation unit to Shandong Lianmeng Chemical, a large chemical company in Weifang, China. The proposed air separation unit is expected to have a production capacity of 2300 ton of oxygen per day, which is expected to be supplied, along with nitrogen, to the chemical plant.
- Air Products has been investing heavily in the country's industrial gases market over the past year, announcing multiple new plant additions that are expected to serve China's booming electronics industry.
- India aims to achieve 300 million metric tons of steel annually by 2025-2030. The increasing steel production in India is expected to increase the demand for industrial gasses, particularly oxygen, which in turn, is likely to drive the demand for air separation units in the country, during the forecast period.
- As India is focusing on encouraging the enhanced oil recovery (EOR) technology, the government has offered 50% of the incremental revenue for those operators using this technique. This is expected to allow higher oil recovery from the existing reserve, and higher revenues for both the operator and the government. In addition, the government is also planning to implement reduced rate of royalty and tax exemption for incremental production from EOR, to promote the technology. Industrial gases are used in oil recovery activities for gas injection, which in turn, also drives the demand for air separation units in India.
- As a result, the increasing uptake of air seperation units from the iron and steel, oil and gas, and chemical end-user segments majorly from China and India is expected to increase the demand for air seperation units in the region.
The market for ASUs remains moderately fragmented, with the presence of multiple big players including Linde AG, Messer Group GmbH, Praxair Inc., Shanghai Chinllenge Gases Co. Ltd, Taiyo Nippon Sanso Corporation, and Air Liquide SA.
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Table of Contents
- 1.1 Scope of Study
- 1.2 Market Definition
- 1.3 Study Assumptions
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET OVERVIEW
- 4.1 Introduction
- 4.2 Market Size and Demand Forecast in USD billion, till 2025
- 4.3 Recent Trends and Developments
- 4.4 Market Dynamics
- 4.4.1 Drivers
- 4.4.2 Restraints
- 4.5 Industry Supply Chain Analysis
- 4.6 Porter's Five Forces Analysis
- 4.6.1 Bargaining Power of Suppliers
- 4.6.2 Bargaining Power of Consumers
- 4.6.3 Threat of New Entrants
- 4.6.4 Threat of Substitute Products and Services
- 4.6.5 Intensity of Competitive Rivalry
5 MARKET SEGMENTATION
- 5.1 Process (Qualitative Analysis)
- 5.1.1 Cryogenic Distillation
- 5.1.2 Non-cryogenic Distillation
- 5.2 Gas (Qualitative Analysis)
- 5.2.1 Nitrogen
- 5.2.2 Oxygen
- 5.2.3 Argon
- 5.2.4 Other Gases
- 5.3 End User
- 5.3.1 Chemical Industry
- 5.3.2 Oil and Gas Industry
- 5.3.3 Iron and Steel Industry
- 5.3.4 Other End Users
- 5.4 Geography
- 5.4.1 North America
- 5.4.2 Asia-Pacific
- 5.4.3 Europe
- 5.4.4 Middle-East and Africa
- 5.4.5 South America
6 COMPETITIVE LANDSCAPE
- 6.1 Mergers & Acquisitions, Joint Ventures, Collaborations, and Agreements
- 6.2 Strategies Adopted by Leading Players
- 6.3 Company Profiles
- 6.3.1 Linde AG
- 6.3.2 Messer Group GmbH
- 6.3.3 Praxair Inc.
- 6.3.4 Shanghai Chinllenge Gases Co. Ltd
- 6.3.5 Taiyo Nippon Sanso Corporation
- 6.3.6 Air Liquide SA
- 6.3.7 Air Products & Chemicals Inc.
- 6.3.8 Universal Industrial Plants Mfg. Co. Pvt Ltd
- 6.3.9 Ellenbarrie Industrial Gases Ltd
- 6.3.10 Sichuan Air Separation Group
7 MARKET OPPORTUNITIES AND FUTURE TRENDS