The global specialty gas industry has been through its fair share of trials and tribulations over recent months. From ongoing concerns over helium production to a potential electronic chip crisis due to a rare gas shortage following Russia’s invasion of Ukraine, the industry is continuing to face increased pressure.
During gasworld’s latest webinar, ‘Spotlight on Specialty Gases’, industry experts from leading companies Electrofluoro Carbons (EFC) and Weldcoa answered questions around the challenges currently being faced within specialty gases.
Ukraine is the world’s largest supplier of noble gases including neon, krypton, and xenon. Globally, the country supplies about 70% of the world’s neon gas and 40% of the global krypton supply. According to the Center for Strategic & International Studies, Ukraine also supplies 90% of the highly purified, semiconductor-grade neon for chip production used by US industry.
Used across the breadth of the electronic chip supply chain, an ongoing shortage of noble gases is likely to dramatically affect the production of technologies that come embedded with semiconductors, including vehicles, computers, military systems, and healthcare devices.
The state of play
Matt Adams, Executive Vice President at Electronic Fluorocarbons, a US-based global supplier of spec gases, revealed that the rare gas industry, especially xenon and krypton, is under ‘tremendous’ pressure.
“There has been a severe impact in the industry related to the quantity available on a material level,” explained Adams.
“In the rare gas market, if the supply is even slightly out of balance with demand, we see increased prices, customers over-ordering and hoarding, which exacerbates the problem.”
As supplies continue to become more restricted, demand is unabating. With the satellite segment holding the largest xenon global market share, the increased investment in satellites and satellite propulsion and its associated technology continues to disrupt a currently volatile sector.
Read more: Fresh chip concerns surface
“When you’re launching a $1bn satellite, you can’t scrap that launch due to lack of xenon, so that means you have to have it,” said Adams.
“That puts additional pricing pressure on the material, and we see rising prices in the marketplace, so our customers are challenged with that.”
To meet these challenges, EFC has continued to invest in purification, distillation, and additional production of rare gases at its Hatfield site in Pennsylvania.
It’s in the name
When it comes to increasing investment into rare gases, the question arises: how? The scarce nature of rare gases implies that challenges abound when it comes to production. The complexity of its supply chain means that impactful change is likely to take years.
Adams explained, “Even if you’re fully committed to the investment, it takes years from the time you decide to invest, the time to actually have the product available to you.”
In the years where a company is building that investment, it’s common to see price fluctuation that may discourage potential investors.
“From that standpoint, I think, while the industry is investing, it needs to invest more because the demand for rare gases is only going to go up.”
Recovery and recycling
By recovering and recycling gases, companies can save on costs and production time. Highly dependent on current pricing, recycling and recovery usually becomes a ‘hot topic’ when gas costs are high. As the market stabilises, the pricing goes back to historic levels and the drive to recycle begins to wane.
With concerns over shortages and environmental factors, this could be set to change.
“Our customers are starting to commit more to recovery and recycling,” revealed Adams. “They want to know that they have the security of supply. The pandemic has really opened the eyes of the end users and now they’re looking at how do we sustainably invest to make sure that we have the materials that we need.”
Doing its part, EFC has visited two satellite companies and recycled gases out of the thrusters directly on the launchpad.
Stating that he thinks the trend will continue, Adams added that the driving forces behind recycling surround access to material and having a robust business continuity plan, two primary reasons to invest.
Rather than new applications for new markets, the spec gas market has been trending towards older products being used for new applications.
“We’re seeing, for example, R&D facilities using CO2 in their production, in their R&D work, which is something you would have never even thought of years ago,” said Adams.
“High purity as a tool is beginning to have a real demand in the marketplace. I think a lot of growth in the Americas will be in niche markets within the markets we’re currently serving.”
This growth could be apparent in technologies such as chips, where technology evolves and gets smaller. If demand for new materials grow, it’s likely that industry will see the materials that are traditionally sold into the space become more sought after.
Echoing Adams’ opinion that emerging markets are likely to be contained mostly in niche markets within already existing industries, Kevin Klotz, Field Technician and Customer Support Specialist at Weldcoa, said that the company has seen a lot more demand for product for the increasingly privatised aerospace sector.
“Everything from gas mixtures to something I would never have considered as even close to a specialty gas; but using CO2 as a superfluid for energy transfer at nuclear facilities or for high end aerospace machining applications.”
“It seems like industries that historically have used a lot of products that would be considered spec gas are diversifying with changes in technology and in new and emerging technologies as far as energy generation, energy storage, and things like that.”
“So, a lot of new and exciting things going on within already existing parts of our world.”