US market report

The US industrial gas market is the largest in the world, accounting for nearly a third of the world industrial gas market. It achieved revenues of approximately $27.05bn in 2023. This is up from just under $18.8bn in 2013, indicating a compound annual growth rate of about 4% per annum over the decade.

The growth of the market needs to be set against the wider context for the country’s gross domestic product in the same period. Average real GDP growth for the decade (2013 to 2023), stood at 2.1% per annum. The US economy shrank, like most others, during the coronavirus pandemic, but in the years since the 2020 pandemic GDP has recorded rebound growth. In 2023 real GDP grew by 2.5%.

Industrial production, as measured by the Industrial Production Index IPI, has experienced more exaggerated fluctuations over the past decade. There have been two periods of decline: in 2016 the IPI saw a decline of 1.8%, while 2020 (the pandemic year) saw a substantial decline of 4.5%. In the years 2021 and 2022 the country saw recovery growth, delivering a decent 4.4% and 3.4% growth respectively in industrial production, whereas the year 2023 shown some slowing down. In fact, industrial production grew by just by 0.2% in 2023.

What about inflation? While things were turbulent for inflation globally in 2022 and 2023, inflation in the US has generally remained low and steady over the last decade. In 2021 and 2022, however, the rate of inflation rose to the highest rate seen in more than 20 years, standing at 4.6% and 7.1% respectively in those years, mostly due to the energy prices growth. In 2023, energy prices dropped after two years of growth and inflation slowed accordingly, coming in at 3.6%.

The gas business

The industrial gas market in the US has been led by two majors:Linde plc and Air Liquide.

Each company commanded a market share of 28% in 2023– equating to about $7.6bn. Air Products, for its part, commanded just under$4bn (15%) in sales. MATHESON had a share of 5% in 2023, which equated to$1.4bn in revenues. Messer, due to business divested by Linde, got a share ofabout 4%, with $1.2bn in revenues. Several other businesses commanded acombined 20% of the market – worth $5.5bn.

Most commercial revenue was generated through packaged gas (anestimated $11.8bn, equating to 44%), while bulk liquid supply accounted for 28%of commercial revenue ($7.5bn), with revenue from onsite supply accounting for$7.3bn (27%).

The main revenue-generating industrial gas in the US wasnitrogen, with $7.9bn or just over 29% of the market. This is not surprising asdeveloped nations will generally have more end-use applications when comparedwith less developed nations. The second-highest revenue comes from oxygen, withthis gas accounting for $5.75bn in sales (including industrial and medicalapplications) or just under 21%. Hydrogen and CO2 generated 14% and 13% ofrevenues respectively. Argon sales accounted for 7%, with the rest of themarket being accounted for through helium, acetylene and specialty gas sales.

End-user markets in the US are heavily geared towards chemicalsand general manufacturing. The general manufacturing sector generated thelargest value of sales in 2023 (19%), with just above $5bn in revenue comingfrom customers in this industry. The chemicals industry followed, accountingfor just under $4.4bn (16%). Metallurgy occupied a similar share of 16% with$4.2bn sales. Refining & energy clients contributed $3.7bn (14%), whilefood and healthcare end users accounted for $3.1bn (12%) and $1.8bn (7%). Thefinal notable sector is electronics, which commands $1.3bn (5%), with otherend-use sectors accounting collectively for the remaining 11%.

The future

gasworld Business Intelligence forecast positive growth for thenext five years. A compound annual growth rate of between   3.9% per annum is our lowscenario, while   4.5% perannum is our high scenario. These growth levels would see the US industrial gasmarket achieve revenues in the region of $32.7bn to $33.7bn by 2028.

Source: gasworld