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The global cryogenic pump market size was valued at USD 3.49 billion in 2019 and is projected to reach USD 6.03 billion by 2027, exhibiting a CAGR of 7.5% during the forecast period.
The growth in the demand for liquefied natural gas (LNG) from the oil & gas sector & petrochemical industry, coupled with the increasing investment in the healthcare and food & beverage industries in developing economies, are the major factors driving the demand for these pumps. Additionally, increasing investments in LNG-based power plants and growing demand for transportation & storage industries have also stoked the demand for these pumps. Hence, significant growth in manufacturing and processing industries, where industrial gases are used extensively, and rising demand for LNG-based power plants are expected to accelerate the market growth during the projected period.
Steep Fall in Investment Resulting in a Huge Gap in Supply and Demand for Cryogenic Pumps
COVID-19 is impacting several industries and businesses, which in turn is hampering the consumption capacity of consumers. The downfall in the global economy caused by the Covid-19 pandemic is having widespread and long-lasting effects on investments in the energy sector. In March 2020, as per a report in the Economic Times, the outbreak of COVID-19 is estimated to have cut investments in the oil & gas industry by USD 30 billion and has delayed the delivery of offshore installations. Owing to the outbreak of pandemic, deliveries of oil platforms and other equipment from yards has been postponed by at least three to six months.
There are 28 floating production, storage, and offloading vessels (FPSOs) under construction, out of which 22 are being built in China, South Korea, and Singapore, which has hampered the storage, production, and processing of hydrocarbons. The pandemic is likely to impact the demand for LNG, which is used in power generation, boilers, road transportation, mining & industrial, rail & ships, and heating and cooking, among other applications. For instance, China imported 14.6 million tons of LNG in the 1st quarter of 2020, which is 5% lesser compared to the previous year. Hence, the growing demand for a clean energy sources and the widespread application of LNG has increased the demand for these pumps.
The delay in the expansion of LNG projects due to COVID-19 has impacted the application of these pumps as well. For instance, Qatar has put on hold the first phase of its North Field expansion project which includes the development of four new LNG trains and eight wellhead platforms, out of which 80 new wells will be drilled, by six months, with the project now starting in 2025. Qatar aims to increase the output from 77mtpa to 110mtpa by 2025 and 126mtpa by 2027, becoming the world's largest producer. Hence, planned initiatives for leveraging LNG demand would accelerate the demand for these pumps in the forthcoming years.
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Increasing Power Demand from Clean Sources of Energy Aids Market Growth
Increasing awareness to harness clean energy among Asia Pacific countries is trending the application of cryogenic pumps to transport and supply LNG at a large scale. There have been significant developments in the United States (U.S.) energy industry related to the trading of liquefied natural gas. The emerging trends in the US are reflected in the form of new liquefaction projects, which are expected to be completed between 2022 and 2025, including Sabine Pass facilities, Cheniere’s Corpus Christi, and Calcasieu Pass project.
Increasing Focus on Manufacturing & Processing Industries to Boost the Market
Increasing investments in industries, including mining and metal, food & beverage, metallurgy, and electronics in the developing economies, would fuel the demand for these pumps. According to the World Investment Report 2018, Asia Pacific received investments worth USD 476 billion of foreign direct investments in the year 2017, which were primarily focused on China and Singapore. In addition, governments are focusing on improvising the industrial policies and regulations to bring a conducive environment for exploring new industries and improve the sustainability amongst competitors. Strategic investment policy priorities, entry and establishment of foreign investors, and promotion and facilitation of investment policies, are some of the supportive regulations which helps to increase the application of industrial gases, resulting in the growth of cryogenic pumps.
Increasing Demand for LNG to Augment Market Growth
There is a significant increase in the demand for LNG owing to the rise in gas-based power plants, moving trends for adopting LNG for residential and commercial sectors, and growing need for clean energy from the industrial sector. For instance, according to Bloomberg New Energy Finance, USD 31 billion was invested in new gas-fired plants in 2017. According to the World LNG Report 2019, published by the International Gas Union, the global trade of LNG increased by 28.2 metric tons in 2018, compared to the previous year.
Thus, increasing trade of LNG across various industries, which includes power generation, railway, shipping, transportation, and maritime industry, propels the uses of this type of pumps.
Growing Investments from Industrial Sector to Aid Market Dynamics
Growing investments in metallurgy, healthcare, food & beverage, and electronics in the developing economies would accelerate the demand for these pumps. The transportation, storage, and regasification applications of cryogenic gases such as nitrogen, argon, oxygen, and LNG hold a strong potential for the application of cryogenic pumps. According to the World Investment Report 2018, published by the UNCTAD, Asia holds the largest share for FDI inflow with an increase of 4%, or USD 512 billion, in 2018. Moreover, China is the largest developing economy, which has USD 139 billion worth of FDI investments in Asia. Additionally, Africa holds 11% of FDI investments worth USD 46 billion.
Volatility In The Prices Of Stainless Steel May Restrict The Market Growth
A cryogenic pump includes a drive shaft, outer pressure containment tube, and an intermediate static support tube, which are made from stainless steel. However, the efficiency of these pumps can be improved by modifying and replacing stainless-steel drive shaft and the concentric static stainless-steel components with components made of a glass/epoxy composite. Stringent regulations for emission of toxic greenhouse gases (GHGs) from steel industry and frequent rise and drop of crude oil supply owing to demand are the major factors attributed to the volatility in steel production and prices, which, would increase the production cost of these pumps.
Centrifugal Pumps Segment to Generate Highest Share Backed by Increasing Applications
Based on type, the market is segmented into a positive displacement pump and centrifugal pump. The centrifugal pump segment is estimated to hold the largest share owing to its wide application in the petrochemical and oil & gas industry for storage, iso-containers loading, and unloading of oxygen, hydrogen nitrogen, argon, and LNG cryogens. These pumps are available in a variety of configurations and are meant for heavy-duty operations. The type positive displacement pump segment is also growing owing to the increasing demand for many high and ultra-high vacuum applications from oil & gas, metallurgy, and chemical industries.
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LNG Segment to Grow Significantly Supported by Heavy Usage in Transportation & Fueling
Based on cryogen type, the market is segmented into nitrogen, oxygen, argon, liquefied natural gas (LNG), and others. The LNG segment is anticipated to hold the largest share owing to its wide range of application areas such as transportation, fueling, storage, processing, and others. It is also used in LNG boilers, power generation, mining, metallurgy, manufacturing, ships, and other industries on a large scale.
The nitrogen segment is estimated to hold the second-largest market share owing to its various applications in food & beverage, healthcare, oil & gas, metallurgy, and chemical industries. The argon & oxygen segments are also showcasing steady growth due to numerous applications, such as arc welding, cutting, and production of titanium in the healthcare and steel industries.
Oil & Gas Segment to Lead the Cryogenic Pump Market Share
Based on end-user, this market is segmented into oil & gas, metallurgy, power generation, chemical & petrochemical, marine, and others. The oil & gas segment is one of the largest and fastest-growing segment, owing to its usage in a wide range of applications, namely, refining, LNG transportation, refueling, regasification, and others. The chemical & petrochemical industry is likely to propel the demand for these pumps due to their application in sulfur recovery units, oxidation processes, coal gasification, cool reactors, regenerate catalysts, and others.
The wide range of applications of argon and nitrogen gases in the metallurgy and marine industries would also accelerate the adoption of these pumps. LNG-based power plants are some of the cleanest users of fossil fuels, releasing 40% less greenhouse gases in the environment. Hence, they are leading to an increase in transportation and storage of LNG on a large scale, which is expected to fuel the power generation segment in the coming years.
Asia Pacific Cryogenic Pump Market Size, 2019 (USD Billion)
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Asia Pacific is one of the fastest-growing regions worldwide subject to growing investments and building infrastructures, which are driving the industrial sector, which in turn is increasing the demand for cryogenic pump applications in industries. The industrial sector includes industries such as manufacturing, processing, and metallurgy, where they are deployed for regasification, storage, and transportation at a large scale. According to the IGU World LNG report 2019, China surpassed LNG imports by 15.8 MT, which is an increase of 41% as compared to the previous year.
The vast potential of LNG and the increasing application of cryogenic pumps in the industrial sector in North America and the Middle East & Africa will create promising growth opportunities and boost the market during the projected period. Countries in Europe are also exhibiting strong growth in the food & beverage and healthcare industries, which is likely to expand revenue streams for players in this region. France, Italy, and Spain are the major countries involved in the growth of petrochemicals, metallurgy, and oil & gas sector in Europe. In Latin America, Brazil is heavily investing in the oil & gas and chemical & petrochemical industries, which is expected to fuel the growth of the regional market in the coming years.
Strategic Expansion & Acquisitions by Key Players to Intensify Market Competition
The market is consolidated owing to the strong product portfolio and remarkable distribution network of leading companies in developed and emerging economies. Currently, Nikkiso Co., Ltd., Ebara Corporation, Cryostar, and Sumitomo Heavy Industries, Ltd. lead the market, accounting for a dominant share in 2019 owing to supportive government policies for transporting LNG. For instance, in January 2019, the National Development and Reform Commission of China approved Yantai LNG, a Chinese company, to construct a liquefied natural gas terminal in the Shandong province.
Other key players such as Elliott Group, Technex Limited, and Trillium US have also entered the market competition with wide product variation in these pumps. For instance, in December 2019, SoftInWay Inc., an industry-leading consulting service and turbomachinery solutions provider, is working on designing the turbo-style configurations of these pumps to meet the pressure rise and flow rate requirements at minimal time and costs.
An Infographic Representation of Cryogenic Pump Market
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The increasing demand for LNG and its application in several industries are the major factors that would fuel the demand for this market during the forecast period. Additionally, the global cryogenic pump market growth is primarily attributed to the increase in demand for these pumps across various end-users such as oil & gas, healthcare, shipbuilding, electronics, and others. Increasing investments in building automation and the development of infrastructure holds a strong growth opportunity for the market. In the forecasted period, the global outlook of these pumps seems to be more lucrative as competing players are investing and incorporating new developments in the technology.
The cryogenic pump market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications across various industries. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market over the forthcoming years.
Value (USD Billion)
By Cryogen Type
Fortune Business Insights says that the global cryogenic pump market size was USD 3.49 billion in 2019 and is projected to reach USD 6.03 billion by 2027.
Growing at a CAGR of 7.5%, the market will exhibit steady growth in the forecast period (2020-2027).
In 2019, the Asia Pacific market value stood at USD 1.29 billion.
The liquefied natural gas segment is expected to be the leading segment in this market during the forecast period.
Increasing demand for LNG and growing investments from the industrial sector are major factors driving the growth of the market. However, increasing raw material prices restraints the market growth in the forecasted period.
Nikkiso Co., Ltd., Sumitomo Heavy Industries, Ltd., Ebara Corporation, The Weir Group PLC, Fives, Sulzer, and Flowserve Corporation are some of the major players in the global market.
Asia Pacific dominated the market share in 2019.
They are used to cryogenic gases such as hydrogen, oxygen, argon, nitrogen, liquefied hydrocarbons, methane, and natural gas at cryogenic temperatures in a wide range of applications, including cooling high-temperature superconducting cables or magnets, and as pumps in prototype slush hydrogen applications.
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