A sense is emerging that the long-held slump in the Japanese compressed hydrogen market has bottomed out, according to The Gas Review (TGR).
A number of factors are cited as being behind the balancing in the market, including the recovery in the silicon wafers business, the high operational ratios of the surviving semiconductor fabs, as well as the stable operation of the automotive industry which consumes a comparatively large amount of hydrogen in processes like heat treatment and glass melting.
There is still no sign of a period of growth, however – the possibility is considered rather low, says TGR. While the trend toward a contraction has petered out, this does not necessarily mean that compressed hydrogen is now on the road to expansion. Areas in which the Japanese manufacturing industry had made repeated capital investments in the past are now increasingly being found in the developing economies; as a result, there is a common awareness in Japan’s industrial gases industry that the growth potential for compressed hydrogen for industrial use is small.
With such dynamics in mind, the contraction of sources, the rise in electricity fees, and the concerted push of liquid hydrogen by Iwatani are complexly intertwined. The rise of liquid hydrogen and the ‘hydrogen economy’ is well documented, while the price of electricity is significant where compressed hydrogen production is concerned as a by-product of electrolysis.
But as part of the industry’s measures to cope with a lessened market for compressed hydrogen, there has been consolidation of plants/sources and the closure of unnecessary production sites. Further, (upward) price revisions are being implemented for each region and customer as a result of the consolidation of plants (distribution expense accounts for up to 30% of the price of compressed hydrogen) and the rise in electricity prices.
The Gas Review, Issue No. 405