Economic activity has been good, demand is up across the board, and pricing improvements are helping returns, were some of the snapshots from the first quarter 2018 Baird Industrial Gas Survey.
Undertaken in partnership with gasworld, the survey provides a snapshot of current quarter trends in the US gases business.
The survey of independent gas distributors found that the revenue trajectory for gases in Q1 2018 was around 7.6%, up sequentially over Q4 2017 and up considerably over the prior year quarter.
The revenue trajectory for hardgoods stood at 3.8% for the quarter.
A similar pattern existed in pricing trajectories, with gases pegged at 3.3% and hardgoods at 1.6% for the quarter. This ties in with the snapshot comment that, “Pricing improvement is helping returns.”
Other snapshot comments or observations included:
However, counter observations to these comments included:
Where strong consensus was reported among respondents was in terms of bulk liquids supply in the US, with all agreed that there were no supply issues related to either oxygen or nitrogen in the quarter.
Relative majorities agreed that there were no supply issues related to liquid carbon dioxide (85% said no supply issues/ 15% noted medium supply issues) or hydrogen (77% / 23%), respectively.
Tight argon supply had been noted in the survey’s snapshots, however, and this was reflected in survey results, with just 55% reporting no supply issues; 36% identified medium supply issues and a further 9% said they were on allocation.
A similar picture existed in bulk helium supply, a market which gasworld had exclusively reported to be tightening again at the start of the year. As few as 8% of respondents reported no supply issues in the Baird survey in Q1, with 50% recording medium supply issues and 42% indicating they were on allocation.
Looking ahead, the pricing for hardgoods is expected to increase, the survey reported. This appears to be matched by the estimated trajectory for hardgoods revenues, however, with an outlook of 5.6% projected for Q2 2018.
The full year outlook for hardgoods is estimated at 5.5%.
For gases a fall in the revenue trajectory is estimated for both the quarter and the year as a whole. The survey suggests a gases revenue trajectory of 6.6% for Q2, and around 5.2% for the year overall.