According to The Gas Review, to predict trends in Japanese industrial gas demand, considering upcoming movements in the main users is essential.
The ‘Special Report: Mid-term Outlook for Japanese Industries’ was released at the end of 2017 by the Industry Research Department of Mizuho Bank. Taking this opportunity, The Gas Review extracted the growth in demand along with the direction of the Japanese industries in terms of the presence in the global market over the next five years to predict the influence on the industrial gas market. The predications target the industries that create the main demand for industrial gases, including iron and steel, nonferrous metals, paper and pulp, automobiles, oil, energy, chemicals, heavy electric machinery and electronics.
Following the last year, this survey indicated the demand growth and the directions in international competitiveness (global presence) of specific Japanese industries in the next five years, using nine matrices,
The results indicate that electronics that electronics, robots, medical equipment, and pharmaceuticals will experience growth over the next five years, while the heavy industries, such as iron and steel, nonferrous metals, paper and pulp, and chemicals, will stagnate. Automobiles and machine tools will maintain moderate growth. Overall, gas consumption by large users will stagnate, and any large expansion in gas sales is difficult to foresee. Nitrogen (N2) demand for electronics centred around electronic components is predicted to remain solid, therefore the difference of demand between oxygen (O2) and N2 is predicted to further increase. A reduction in global competitiveness in petroleum products and chemicals is bound to have an even greater influence on source procurement for carbon dioxide (CO2) and hydrogen (H2).
Electronics, robots, pharmaceuticals, and medical equipment present high growth potential and will tend to give Japan a greater presence on the global market.
In electronics, demand for devices and other main electronic components will increase 0.2% in Japan, but 2.9% globally. The Gas Review explained, “Electronic equipment such as smartphones becomes more advanced and the demand for devices will increase in automobiles and IoT, which will support the industrial gas market expansion.”
Robots maintain a high growth potential and a strong Japanese presence on the global market. The value of robot shipments over the next five years will increase 6% in Japan and 11.8% globally. The Gas Review concluded, “Worker shortages in Japan will increase the demand for automation, and globally, automation will progress in China.”
High growth is also forecast for pharmaceuticals and medical equipment. The average value of shipments of pharmaceuticals in Japan will increase 1% and the global market will grow 6.1%. For medical equipment, growth of 2.4% in Japan and 5.2% globally are predicted.
Robots and medical equipment are portfolios, which form an interface to industrial gas business. New gas business areas can be secured by creating gas business models that combine robots or other equipment with gases. In pharmaceuticals as well, demand for gas-related equipment can be created through linking with liquid N2 freezing containers and CO2 incubators for cell culturing in biologics. Future gas business trends will depend on whether or not proposals can be made that combine gas with equipment in the industrial fields where growth potential is foreseen.
In automobiles, a 2.1% drop in the number of cars sold in Japan is predicted over the next five years, compared with a 1.1% increase globally. The Gas Review indicated, “Global demand is firm, but the modality of competition will change as electric cars, self-driving cars and car sharing spread as expected in the 2020s. There are concerns that the presence of Japanese corporations will decline.”
Increases in car electronics, sensors and other devices accompanying electronic motorisation and automation are factors that will possibly create increased demand for electronics related gases. Regulations requiring the sale of electric vehicles in the US and China will increase the entry of EVs and FCVs into the market, pushing up the demand for battery gases and for high-pressure H2 equipment, but by how much is the question.
The average growth in contract amounts in Japan for machine tools over the next five years will be minus 5% due to the reduction in the number of automobiles produced in Japan. The Gas Review concluded, “However, overseas demand will remain solid. Developing countries have yet to catch up with IoT implementation and machine performance, so the presence of Japanese corporations in the global market will remain strong.”
The Industry Research Department of Mizuho Bank periodically surveys the industrial trends of Japan’s main industries and releases the results on their website. But for heavy industries, there is no denying the sense of stagnation, as mentioned above. Over the next five years, negative growth is predicted for iron and steel, nonferrous metals, paper and pump, and petroleum products. Although chemicals are predicted to grow 0.1%, The Gas Review concludes that “the export environment will deteriorate for Japanese corporations.”
The Gas Review, issue no. 448