Asia-Pacific Industrial Gases Market Outlook, 2029

The industrial gases market in the Asia-Pacific (APAC) region is a dynamic and rapidly growing sector, fueled by a robust manufacturing base and ongoing infrastructure development projects. Industrial gases encompass a diverse range of elements and compounds, including oxygen, nitrogen, hydrogen, and specialty gases, each playing a crucial role in various industrial processes. These gases are vital for activities like metal fabrication, welding, inert atmospheres for chemical reactions, and food preservation, making them essential inputs across numerous industries within the APAC region. The market caters to this demand by providing a reliable supply of industrial gases through a network of producers, distributors, and end-users.

One of the most distinctive features of the APAC industrial gases market is the presence of a large number of state-owned enterprises (SOEs) within the gas production sector. These SOEs play a significant role in ensuring the availability of essential industrial gases at competitive prices. In some APAC countries, SOEs might operate as monopolies or control a substantial share of the market. Understanding the influence of SOEs and their pricing strategies is crucial for private gas producers and foreign investors entering the APAC market. While SOEs can provide stability and offer a readily available supply of industrial gases, navigating their procurement processes and pricing structures can be complex for private companies.

However, the landscape is evolving. In recent years, there has been a growing trend towards privatization and liberalization within the APAC industrial gases market. Several governments in the region are encouraging private sector participation in gas production and distribution. This trend is driven by a desire to enhance efficiency, promote competition, and attract foreign investment in advanced gas production technologies. For instance, China has implemented reforms to allow private companies to participate in the city gas distribution market.

This privatization trend creates opportunities for private gas producers and international companies to enter the APAC market and contribute to its growth and technological advancement. The presence of SOEs alongside the emergence of private players necessitates a focus on collaboration and strategic partnerships within the APAC industrial gases market. SOEs can leverage their established infrastructure and distribution networks, while private companies can bring in expertise in advanced gas production technologies and international best practices.

According to the report, the Asia Pacific Industrial Gases market is anticipated to grow with more than 6.7% CAGR from 2024-2029. One of the most striking characteristics of the APAC industrial gases market is the presence of a large and well-established network of local and regional gas producers. Unlike other regions where multinational corporations dominate the market, the APAC landscape features a significant number of domestic players alongside international suppliers. These local and regional producers often possess a deep understanding of the specific needs of their customer base within the APAC region.

They can tailor their product offerings and distribution strategies to cater to the diverse requirements of various industries, potentially offering more competitive pricing and shorter lead times compared to international suppliers. Furthermore, local producers often have well-established relationships with regional distributors and transportation networks, ensuring efficient gas delivery to customers across the APAC region. This strong presence of local and regional players fosters a collaborative and competitive environment within the APAC industrial gases market.

Local producers collaborate with international suppliers in areas like technology transfer and joint ventures, leveraging their combined expertise to develop innovative gas production methods and advanced gas applications. This collaboration fosters knowledge sharing and accelerates technological advancements within the APAC market. At the same time, the presence of international suppliers with established global distribution networks introduces an element of healthy competition, driving local producers to continuously improve their operational efficiencies and service offerings to remain competitive.

This dynamic interplay between local and international players creates a thriving market environment that benefits both gas suppliers and industrial gas users within the APAC region. For instance, several leading Indian industrial gas companies have established strategic partnerships with international giants to enhance their technological capabilities and product portfolios. These partnerships allow Indian producers to access advanced gas production technologies and expertise in areas like cryogenic separation and gas purification. Similarly, Chinese gas companies are increasingly collaborating with international players to expand their production capacity and distribution networks, catering to the growing demand for industrial gases across the Asia-Pacific region.

Market Drivers

• Rapid economic development and industrialization: Countries like China, India, and South Korea are witnessing a surge in manufacturing activities, particularly in sectors like electronics, automotive, and construction. These industries heavily rely on various industrial gases for critical processes, such as oxygen for metal fabrication, nitrogen for creating inert atmospheres in electronics production, and carbon dioxide for welding applications. The ongoing expansion of these industries and the increasing demand for high-quality manufactured goods create a robust demand for industrial gases within the APAC region.
• Rising demand for medical-grade industrial gases: The region's growing population and increasing disposable incomes are leading to a demand for advanced medical care. Medical-grade oxygen plays a vital role in hospitals for critical procedures and respiratory support systems. Furthermore, other industrial gases like nitrous oxide are used as anesthetics in surgeries. The expanding healthcare infrastructure and the growing adoption of minimally invasive procedures in APAC hospitals create a strong demand for a reliable supply of medical-grade industrial gases, propelling market growth.

Market Challenges

• Complexities associated with logistics and infrastructure: The vast geographical expanse of APAC, coupled with the presence of developing economies with varying infrastructure levels, presents logistical hurdles for industrial gas companies. Ensuring efficient and cost-effective transportation of bulk gases, particularly to remote locations, necessitates investments in infrastructure development, such as expanding pipeline networks and exploring alternative transportation methods like cryogenic tankers. Furthermore, establishing strategically located storage facilities can enhance supply chain efficiency and cater to the needs of geographically dispersed industrial consumers within the APAC region.
• Stringent environmental regulations and growing concerns about sustainability: Governments across APAC are implementing stricter regulations to curb air pollution and greenhouse gas emissions. These regulations can impact traditional industrial gas production processes that rely on fossil fuels. Investing in cleaner production technologies, exploring renewable energy sources for powering air separation units, and adopting carbon capture and storage solutions are crucial for industrial gas companies to operate sustainably and comply with evolving environmental regulations within the APAC market.

Based on the report, the Industrial Gases market is segmented into Oxygen, Nitrogen, Hydrogen, Carbon Dioxide and Acetylene.

Oxygen occupies the leading position within the APAC industrial gases market. This is primarily driven by the region's booming steel production sector. Oxygen plays a vital role in various steelmaking processes, including blast furnace operations and oxy-fuel cutting. Furthermore, the growing healthcare sector in the APAC region, particularly in countries like China and India, is creating a heightened demand for medical-grade oxygen for critical care applications. The increasing disposable incomes and aging population within the region further contribute to the demand for medical oxygen. Nitrogen represents another significant segment within the APAC industrial gases market.

Its applications span various industries, including food and beverage processing, electronics manufacturing, and chemical production. The rising demand for packaged and frozen food in the APAC region, fueled by urbanization and busy lifestyles, translates to a growing need for nitrogen for food preservation and modified atmosphere packaging (MAP). The burgeoning electronics industry, particularly in countries like China and South Korea, utilizes nitrogen for inert gas purging during chip fabrication and other sensitive electronic processes. Additionally, the expanding chemical sector within the APAC region utilizes nitrogen for various applications, including inerting storage tanks and purging pipelines.

Hydrogen consumption within the APAC industrial gases market is expected to witness significant growth, driven by the burgeoning refinery and petrochemical sectors. Hydrogen is utilized in various refinery processes, such as hydrocracking and hydrotreating, to improve fuel quality and remove impurities. Furthermore, the growing focus on clean energy sources in the APAC region, particularly in countries like Japan and South Korea, is creating a demand for hydrogen for use in fuel cell technology and potential future applications in hydrogen fuel vehicles. Carbon Dioxide (CO2) finds application across various industries within the APAC market. The food and beverage sector utilizes CO2 for carbonation of soft drinks and beers.

Additionally, the CO2 segment benefits from the growing demand for dry cleaning services in the region's major cities, as CO2 is increasingly employed as an eco-friendly cleaning solvent. The rising disposable incomes and increasing urbanization within the APAC region are key drivers for this segment's growth. Acetylene, while a smaller segment compared to others, finds application in metal cutting and welding processes across various industries, including construction and shipbuilding.

However, safety concerns surrounding acetylene storage and handling, coupled with the development of alternative welding technologies, might limit the growth of this segment within the APAC market. The final segment encompasses other industrial gases like ammonia, methane, butane, and propane. These gases cater to a diverse range of applications, including refrigeration (ammonia), natural gas production (methane), industrial heating (butane), and LPG (liquefied petroleum gas) for cooking and heating applications (propane).

According to the report, the Industrial Gases market is segmented into Manufacturing Industry, Chemical Industry, Metal & Mining Industry, Energy & Power Industry, Food & Beverage Industry and Healthcare Industry.

The Metal & Mining Industry stands out as the leading consumer of industrial gases within the APAC region. This dominance can be attributed to the burgeoning metal fabrication and construction sectors in several APAC countries. Industrial gases like oxygen, nitrogen, and welding gases play a critical role in various metalworking processes, including cutting, welding, and heat treatment. Furthermore, the mining industry utilizes industrial gases for blasting operations, flotation processes, and metal extraction techniques.

The ongoing infrastructure development projects and urbanization across APAC, coupled with the presence of rich mineral reserves in some countries, are expected to propel the demand for industrial gases within the Metal & Mining industry. The Manufacturing Industry, encompassing a wide range of sub-sectors, represents another significant consumer of industrial gases in the APAC region. This includes sectors like automotive, electronics, and chemicals, all of which rely on industrial gases for various applications. Inert gases like nitrogen are used to create oxygen-free environments during electronics manufacturing and welding processes. Hydrogen finds application in brazing and soldering within the automotive sector.

Additionally, the growing focus on automation and advanced manufacturing techniques within the APAC region is expected to create a demand for specialty gases used in high-precision processes like laser cutting and 3D printing. The Chemical Industry is a crucial end-user segment within the APAC industrial gases market. Industrial gases like oxygen, nitrogen, and hydrogen are essential for various chemical processes, including production of ammonia, fertilizers, and plastics. The burgeoning chemical industry in several APAC countries, driven by factors like increasing domestic consumption and export opportunities, translates to a heightened demand for industrial gases.

Furthermore, the growing focus on clean energy sources like hydrogen fuel cells presents a potential new avenue for industrial gas demand within the chemical sector. The Energy & Power Industry represents another key end-user segment in the APAC industrial gases market. Industrial gases like oxygen, nitrogen, and compressed natural gas (CNG) play a vital role in power generation, oil & gas production, and refining processes. Oxygen is used in oxy-fuel combustion for enhanced efficiency in power plants. Nitrogen finds application in purging pipelines and storage tanks within the oil & gas sector.

The increasing demand for energy within the APAC region, coupled with ongoing investments in renewable energy sources like hydrogen and natural gas, is expected to drive the demand for industrial gases in the Energy & Power industry. Food & Beverage and Healthcare industries also contribute to the APAC industrial gases market, albeit to a smaller extent compared to the segments mentioned above. In the Food & Beverage sector, industrial gases like carbon dioxide and nitrogen are used for food preservation, packaging, and carbonation of beverages. The growing emphasis on packaged and processed food within the APAC region is expected to increase the demand for these gases.

In the Healthcare industry, medical-grade gases like oxygen, nitrous oxide, and medical-grade air are essential for various medical procedures. The expanding healthcare infrastructure and rising disposable incomes within the APAC region are expected to contribute to the demand for medical-grade industrial gases. Finally, the "Other" segment encompasses a diverse range of end-user industries, including electronics, textiles, and water treatment. The specific industrial gases used within this segment vary depending on the application. For instance, the electronics industry might utilize specialty gases for semiconductor manufacturing, while the water treatment sector might employ oxygen for oxidation processes.

Based on the report, the major countries covered include China, Japan, India, Australia, South Korea, and the rest of Asia Pacific.

China stands out as the undisputed leader within the Asia-Pacific (APAC) industrial gases market, driven by a confluence of factors that create a strong demand environment. One of the most significant drivers is China's established and rapidly growing manufacturing sector. The country boasts a well-developed industrial base encompassing industries like steel, automotive, electronics, and chemicals. These industries are major consumers of industrial gases, such as oxygen, nitrogen, and hydrogen, used in various production processes like metal cutting, inert atmospheres, and chemical synthesis.

The sheer scale and continuous growth of China's manufacturing sector translate to a persistent and substantial demand for industrial gases, solidifying the country's position as the leading market within the APAC region. Beyond its established manufacturing base, China is also witnessing significant growth in emerging sectors that heavily rely on industrial gases. The burgeoning renewable energy sector, focusing on solar and wind power generation, necessitates a steady supply of industrial gases like helium and argon used in welding and creating inert atmospheres during manufacturing processes.

Similarly, the rapid advancement of China's technological sector, with a focus on electronics and semiconductor production, fuels demand for high-purity specialty gases essential for chip fabrication and other advanced technological applications. This diversification across established and emerging industries creates a multifaceted demand for a wide range of industrial gases within the Chinese market. Furthermore, the Chinese government plays a crucial role in supporting the growth of the domestic industrial gas market. Several government initiatives promote increased domestic production of industrial gases to reduce dependence on imports and bolster self-sufficiency. These initiatives can include tax breaks for local gas producers, subsidies for research and development in gas production technologies, and policies encouraging exploration of domestic gas reserves.

Years considered in this report:

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in the report:

• Industrial Gases market outlook with its value and forecast, along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Type:

• Oxygen
• Nitrogen
• Hydrogen
• Carbon Dioxide
• Acetylene
• Other Types (Ammonia, Methane, Butane, And Propane)

By End user Industry:

• Manufacturing Industry
• Chemical Industry
• Metal & Mining Industry
• Energy & Power Industry
• Food & Beverage Industry
• Healthcare Industry
• Others

By Mode of Distribution:

• On-Site pipe line
• By Bulk
• By Cylinder

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. After this, the research team made primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once the research team attained the primary data, they verified the details obtained from secondary sources.

Intended Audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Industrial Gases industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.