The recovery of the industrial gas business from 2012 through 2014 was strong, five percent per year, driven by price and volume with manufacturing being a bright spot, a significant driver for the industrial gas (IG) industry. However, 2015 and 2016 have been hindered by a weakening manufacturing sector and currency headwinds.
The IG business declined two percent in 2015. We are now about halfway through 2016 and, in the US, this year’s economy appears to be flat-to-down compared to last year. In this report, we look at how this sluggishness has impacted industrial gas players and independent gas distributors in 2015, with a focus on growth opportunities and industry trends.
Energy, electronics, healthcare, chemicals, petrochemicals, and food and beverage are each driving volume and the push toward providing increasingly sophisticated gases and applications both within and outside the scope of the traditional industrial gas business. The US is producing shale oil and gas on a large scale using fracturing with energized fluids, which is driving demand for carbon dioxide and nitrogen. Imports from China, due to low prices for steel, are mostly responsible for the 12 percent drop in raw US steel production in 2015, to 87 million tons per year. Steel is a big user of oxygen produced in air separation units.
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