Which Industries Use Industrial Gases—and Which Gases Are Involved?
Industrial gases refer to a wide range of gaseous products that exist in gaseous form under normal temperature and pressure. Based on composition, they can be divided into pure gases and mixed gases. By chemical properties, they are categorized as toxic gases (e.g., chlorine, ammonia), flammable gases (e.g., hydrogen, acetylene), and inert gases (e.g., oxygen, nitrogen, argon).
By production methods, industrial gases fall into two major categories: air separation gases and other industrial gases. The latter includes synthetic gases (e.g., hydrogen, acetylene, CO₂) and specialty gases. Air separation gases are produced by separating atmospheric air and account for around 90% of total industrial gas output, serving a wide range of end-use industries.
Specialty gases, while used in smaller volumes, require extremely high purity levels and minimal impurities. These gases have high economic value and have become increasingly critical with the rise of the electronics industry. They are widely used in semiconductors, display panels, photovoltaic energy, fiber optics, electric vehicles, aerospace, environmental protection, and healthcare. Examples include electronic gases, high-purity gases, and calibration gases.
Storage and Physical Properties
Industrial gases are typically stored in compressed or liquefied forms within cryogenic cylinders or tanks. Due to their compressibility and expansion characteristics, they must be handled with care. Under constant temperature, increasing pressure can liquefy gases; under constant pressure, rising temperature may increase molecular activity and even cause container rupture.
The industrial gas industry has a long history, but the emergence of new applications—especially for specialty gases—is driving the next wave of growth.
Application Industries
Industrial gases are essential across a wide range of sectors, including:
- Metallurgy
- Petrochemicals
- Chemicals
- Machinery
- Electronics
- Glass & Ceramics
- Construction
- Food Processing
- Pharmaceuticals & Healthcare
Currently, metallurgy and chemicals are the largest consumers of air separation gases. In the future, rapid growth in electronics, new energy, magnetic materials, and environmental sectors will significantly expand demand for these gases.
Role of Air Components
- Oxygen is highly reactive and is commonly used as an oxidant or combustion enhancer.
- Nitrogen is chemically stable and often serves as a shielding or purging gas. It is also used in pipeline transportation of natural gas.
- Argon, an inert gas, is used as a shielding gas in steel production, semiconductors, solar cells, welding, and lighting.
Industrial gas usage has broadened beyond traditional steel and petrochemical industries. By 2015, emerging sectors such as healthcare, food, electronics, and new energy accounted for nearly 50% of industrial gas consumption—driving consistent demand growth.
Market Overview: China and the Global Landscape
According to data from Low Temperature and Special Gases, the National Bureau of Statistics, and Qianzhan Industry Research Institute, China’s industrial gas market is valued at around RMB 150 billion (~USD 23 billion), while the global market is worth approximately USD 120 billion. China accounts for nearly 19% of global consumption.
From 2015 to 2022, China’s industrial gas market grew at a compound annual growth rate (CAGR) of 8.7%, outpacing the global CAGR of 6.0%. However, China’s per capita consumption remains low—USD 16 per person in 2022, compared to USD 54 in the U.S. and USD 44 in Western Europe.
The global industrial gas market is highly concentrated. Four leading players—Linde (which merged with Praxair in 2018), Air Liquide, Air Products, and Nippon Sanso—accounted for 70% of the third-party gas supply market in 2019.
Domestic Market Dynamics
In China, international gas giants initially captured market share through partnerships with major state-owned enterprises in steel and petrochemicals. However, local companies have rapidly gained ground. For example, Yingde Gases has grown significantly since its founding in 2001, leveraging flexible private ownership before being acquired by PAG in 2017.
Hangzhou Oxygen Plant Group (Hangyang) currently holds around 50% of newly added third-party gas supply projects, leading the domestic market. Although their share in the existing market remains small, they are expected to grow rapidly.
Business Models and Supply Modes
Industrial gas supply can follow two models:
- On-site gas generation (customer-owned)
- Third-party supply, including:
- On-site production (outsourced)
- Retail (bottled or liquid gases)
In China’s early industrial gas market, many large users—especially SOEs—opted to build their own air separation units. However, these often led to inefficiencies and wasted gas. Since the late 1990s, specialized suppliers have emerged, accelerating market outsourcing.
By 2019, self-supply accounted for 42% of the market (down from 51% in 2010). This figure is expected to fall further to 36% by 2025. In contrast, developed countries reached over 80% outsourcing by 2012.
Compared with self-supply, outsourced gas supply offers greater efficiency, reliability, and lower operating costs. For example, large-scale air separation units (output >5000 Nm³/h) consume only half to one-third the energy of smaller units.
Retail models are especially viable in emerging industries where gas demand is smaller but more diverse. Retail gases, usually supplied in cylinders or as cryogenic liquids, also offer higher profit margins than pipeline supply.
Technological Development
Despite China’s rapid growth, domestic gas producers still lag behind international peers in key technologies. Future competitiveness depends on enhancing R&D and building technical expertise.
Key Technologies
- Gas Separation:
Includes membrane separation, adsorption, distillation, and chromatography. Adsorption and distillation are the most widely used due to efficiency and purity. - Gas Purification:
Techniques such as chemical reactions, selective adsorption, cryogenic distillation, and palladium membrane purification enable production of high-purity and electronics-grade gases. - Gas Blending:
High-precision blending techniques—by weight, pressure ratio, or flow control—are used to produce stable and accurate gas mixtures for electronics, healthcare, welding, and more. - Container Treatment:
Especially critical for specialty gases, including cleaning, polishing, and stabilization processes to prevent contamination and ensure purity. - Filling Technology:
Industrial gas cylinders are classified as special equipment and require strict compliance with safety standards due to repeated use and high pressure. - Gas Detection:
Techniques such as TCD, FID, PDHID, cavity ring-down spectroscopy, and inductively coupled plasma mass spectrometry are employed to detect impurities down to ppb and ppt levels.
Industry Chain Structure
- Upstream: Equipment and raw material suppliers, including manufacturers of air separation units.
- Midstream: Gas suppliers, such as Hangyang and Heye Gases.
- Downstream: Applications vary based on gas properties, with demand in steelmaking, petrochemicals, welding, and processing.
Key Industry Use Cases
- Coal Chemical Industry:
Uses large volumes of oxygen and nitrogen. Oxygen acts as a gasifying agent and reactant; nitrogen is used as a synthesis gas component, purge gas, and protective gas. - Metallurgy:
Oxygen is used in blast furnace and converter processes; nitrogen serves as a shielding and purging gas; argon is vital in stainless steel production. - Petrochemicals:
Oxygen and nitrogen are used in ammonia synthesis, oxidation reactions, and as safety gases in oil extraction.
Table: Major Types of Industrial Gases and Their Typical Applications
| Gas Type | Chemical Property | Key Industries | Typical Uses |
|---|---|---|---|
| Oxygen (O₂) | Reactive, supports combustion | Metallurgy, petrochemicals, coal chemicals, glass, healthcare | Steel refining, chemical oxidation, gasification, medical oxygen |
| Nitrogen (N₂) | Inert, stable | Electronics, food processing, metallurgy, petrochemicals, pharmaceuticals | Protective gas, inerting, blanketing, pipeline purging, cryogenic freezing |
| Argon (Ar) | Inert, noble gas | Metallurgy, semiconductors, solar energy, welding, lighting | Shielding gas, arc welding, silicon purification, light bulb filling |
| Hydrogen (H₂) | Highly flammable | Refining, electronics, glass, fuel cells, chemical synthesis | Hydrogenation, reduction agent, energy carrier |
| Acetylene (C₂H₂) | Highly flammable | Metal fabrication, welding, cutting | Oxy-acetylene welding and cutting |
| Carbon Dioxide (CO₂) | Mildly reactive | Food & beverage, fire safety, agriculture, welding | Carbonation, fire extinguishing, modified atmosphere packaging, MIG welding |
| Chlorine (Cl₂) | Toxic and reactive | Chemicals, water treatment, pharmaceuticals | Disinfection, chemical synthesis |
| Ammonia (NH₃) | Toxic and reactive | Fertilizer production, refrigeration, chemicals | Nitrogen source, refrigerant |
| Specialty Gases | High purity, tailored mixes | Semiconductors, displays, photovoltaics, optical fiber, aerospace, R&D | Etching, doping, calibration gases, shielding, leak detection |
JinHong Gas: Your Trusted Industrial Gas Partner
JinHong Gas is a leading integrated gas supplier based in China, offering a complete portfolio of industrial gases, specialty gases, and equipment solutions. With decades of experience and a strong commitment to quality and innovation, JinHong serves a wide range of industries including metallurgy, electronics, healthcare, environmental protection, and advanced manufacturing.
Our production facilities and logistics network ensure safe, timely, and cost-effective delivery of gases in both bulk and packaged formats. Whether you’re looking for high-purity specialty gases for semiconductor fabrication or large-scale oxygen and nitrogen supply for steel production, JinHong Gas provides customized solutions to meet your needs.
As the global market continues to evolve, JinHong Gas remains dedicated to driving technological progress and supporting sustainable development across industries worldwide.
