In the build up to the Europe Industrial Gas Conference 2016, and to coincide with the publication of its updated European industrial gas reports and dashboard series, gasworld Business Intelligence highlights the key trends that have emerged over the past year.
Whilst industrial growth in Europe remained modestly positive in 2015, the market witnessed a slight contraction. With industrial gas pricing marginally down on 2014, and weaknesses in some of the industry’s key end-users, gasworld Business Intelligence estimates that its European industrial gas market shrank by approximately 0.5%, on a comparable basis, in 2015. Despite this decline, industrial gas margins have been maintained and slightly increased in some cases, as the sharp fall in energy prices have resulted in cheaper operating costs for the larger gas producers.
In this article, gasworld Business Intelligence draws upon a number of key countries and regions that exemplify the state of play for Europe in 2015.
It is estimated that the commercial industrial gases market in the UK shrank by just over 1% in 2015, to approximately £1.4bn (€2.12bn). The majority of the decline was felt by BOC, the wholly-owned subsidiary of The Linde Group. In July 2015, BOC announced a £25m expansion to its Teesside site, chiefly to support the increased demand from the adjacent SSI Steel mill. Within three months of signing the contract, SSI was forced to mothball the mill in the face of the ongoing steel crisis.
The updated UK industrial gases report explores the impacts of this event, in addition to other key trends that have emerged in this important market over the past year.
Despite the ongoing conflict in the country, the Ukrainian industrial gas market achieved estimated growth of approximately 15% in 2015 (in local currency). Of course, when this is estimated in US dollar terms, growth completely reverses and amounts to a -37% drop in revenue, due to the negative currency impact.
Growth in the domestic market has been achieved by a number of companies experiencing staggering growth of over 30% in 2015. This has, however, been partially offset by a number of local gas businesses that have ceased trading, and scheduled projects that failed to come to fruition in 2015.
Industrial gas market growth has generally been positive in the Scandinavian region, with combined revenues coming in at just under €1.5bn in 2015. Iceland has benefited from strong growth of around 5.5%, albeit from a low base. Recent news of a new carbon dioxide (CO2) purification facility, set to come on-stream in 2017, will add some much needed competition to the currently monopolised market.
The Swedish market has also witnessed positive growth, aided by new capacity. In January 2015, Linde brought on-stream a 570 tonnes per day air separation unit for Perstorp Oxo, in Stenungsund.
In the run up to the European Industrial Gas Conference 2016, gasworld Business Intelligence has published the 2015 series of industrial gas market reports – covering each industrial gas market in Europe. Each report details:
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