The Gas Review reports that the highest ever gases price revision is underway in Japan, as rises in the economy continue and the industrial gases industry cannot absorb costs through its own efforts any longer.
Continually increasing crude oil prices and soaring costs of raw materials have pushed the industry towards major price corrections this spring, with many already implemented and price increases for most gases including oxygen, nitrogen, argon, helium, carbon dioxide, hydrogen, acetylene and specialty gases called for.
Proposed price increases are attributable to 4 key factors, though a fifth factor is also up for consideration. The soaring price of crude oil, the skyrocketing in the price of raw materials, the rise in manufacturing and transportation costs, and the increase in capital investment are all cited as the main reasons for the price revision, while the fifth factor is seen as supply shortages and tightening gas supplies. Certain gas resources are becoming rare including reliance on imports such as xenon and helium, with xenon in particular increasingly used in large quantities in the fabrication of PDP televisions and semiconductors in Japan, Korea and Taiwan.
Early estimations suggest that the price hike differs according to the source of supply, but a general increase of 2-6 folds that of the market price last year is expected.
It’s already been revealed that Taiyo Nippon Sanso will implement a price increase as of April 2008 for 6 gases – these being oxygen, nitrogen, argon, carbon dioxide, hydrogen and helium.
Nitrogen, argon and carbon dioxide will rise by an average of 10% for those sold by tank truck load and an average of 20% for those sold by cylinder. Hydrogen and helium will rise by an average of 20-30% sold both by cylinder and tank truck load.
Revisions were said to have been caused by increases in the costs of production, procurement and transport, while costs for supplying liquid bulk gases have risen by 10%.
Similarly, Iwatani International raised its price for gaseous hydrogen as of 1st February, stemming again from the skyrocketing price of raw fuels including naptha, methanol and natural gas. The increase in transport costs is also cited, while the increase in safety and environmental spending, as well as expenses for vehicle maintenance, are also thought to be putting pressure on profits.
Japan Air Gases (JAG) has announced price revisions too, implemented across industrial and medical gases as of 1st March 2008 and joining the likes of Iwatani, Koatsu Gas Kogyo and Denki Kagaku Kogyo in declaring rises. Gases affected by the increases include oxygen, nitrogen and argon (10-20%), carbon dioxide and hydrogen (10-30%), helium, krypton and neon (20-30%), and xenon (over 60%).