World - Hydrogen - Market Analysis, Forecast, Size, Trends And Insights
Update: COVID-19 Impact
Global Hydrogen Market to Struggle Against Turbulence Caused by the Pandemic
IndexBox has just published a new report: 'World - Hydrogen - Market Analysis, Forecast, Size, Trends And Insights'. Here is a summary of the report's key findings.
The global hydrogen market rose modestly to $22.7B in 2019, growing by 4.6% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers' margins, which will be included in the final consumer price).
China ($4.8B), the Netherlands ($2.7B) and Russia ($1.8B) constituted the largest hydrogen markets worldwide in 2019, with a combined 41% share of the global market (IndexBox estimates). These countries were followed by the U.S., Germany, Brazil, Spain, Japan, India, Indonesia, France and Finland, which together accounted for a further 36%.
Consumption of industrial gases depends on the state of the economy and the performance of the industrial sector; therefore, the dynamics of the market as a whole reflects the country's GDP growth. Until 2020, the global economy has been developing steadily for five years, although at a slower pace than in the previous decade. The slowdown in global economic growth was caused by a slowdown in the world's economy, increased political uncertainty in the world, and trade wars between the United States and China. According to the World Bank outlook from January 2020, the global economy was expected to continue moderate but steady growth, with an average rate of 2.5% per year in the medium term.
In early 2020, however, the global economy entered a period of the crisis caused by the outbreak of the COVID-19 pandemic. Large-scale restrictions on the operation of enterprises due to quarantine measures disrupt economic growth heavily, increase unemployment, and lower consumer spending. In addition, due to the high level of uncertainty, investment prospects are deteriorating, which negatively affects the renewal of the industrial equipment. Thus, according to the World Bank, the global economy is forecasted to plummet by -5% in 2020 and then to start recovering gradually.
The global industry currently experiences high turbulence caused by the pandemic, mainly by the lockdown of factories and hampered consumer demand. The global hydrogen market also faces challenges due to the pandemic in the major fundamentals relevant to a b2b market: macroeconomic conditions, sales channels, supply chains, and prices.
Against the backdrop of the introduction of quarantine restrictions which lead to the closure of production, a halt in transport activity, and a drop in incomes, over March-April of 2020, many countries experienced a drastic drop of industrial production. This, in turn, leads to a decrease in the use of technical gases including hydrogen. Since hydrogen is a raw material for ammonia production, the world market is also influenced by the demand for agricultural fertilizers. The agricultural sector as a whole is less sensitive to the pandemic crisis, which will support hydrogen demand. At the same time, since hydrogen is widely used in refining, the problems of the oil industry will affect the decline in hydrogen consumption in this segment.
The market is hampered by reduced capital investment which may lead to the postponement of plans for both the establishment of new facilities and the modernization of existing ones. After the ease of the quarantine shutdown, a recovery in industrial manufacturing is expected. As the global industry recovers, the hydrogen market balance will also be restored ' accordingly, the pandemic's contribution to the hydrogen market will be noticeable, but not disastrous.
As the hydrogen market is predominantly a b2b-market, no dramatic changes are expected with regard to sales channels. However, online communication becomes increasingly important even in the b2b sales channels, with the use of distant negotiations and electronic document workflow.
The market is likely to face pressure on prices that come from pandemic-related reasons. Thus, a sharp drop in oil prices amid the pandemic will lead to a decrease in the cost of raw materials and inputs, particularly, natural gas prices. Moreover, a temporary increase in unemployment against the background of the closure of entire sectors of the economy will entail a decrease in the cost of labor, which will also reduce the cost of production. On the side of demand, lower consumer budgets will make sellers hold the prices.
In 2020, hampered by the lockdown and decreased investment caused by the pandemic, the global consumption of hydrogen should decline by approx. -5% against 2019, and then rebound somewhat in 2021. In the medium term, as the global economy recovers from the effects of the pandemic, the market is expected to grow gradually. Overall, market performance is forecast to pursue a slightly upward trend over the next decade, expanding with an anticipated CAGR of +1.8% (IndexBox estimates) for the period from 2019 to 2030, which is projected to bring the market volume to 32B cubic meters by the end of 2030.
Source: IndexBox Platform
This report provides an in-depth analysis of the global hydrogen market. Within it, you will discover the latest data on market trends and opportunities by country, consumption, production and price developments, as well as the global trade (imports and exports). The forecast exhibits the market prospects through 2030.
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