Market Trends of Oxygen Industry
Healthcare Sector Expected to Dominate the Market
- Oxygen is a critical medical resource that is indispensable for treating respiratory conditions like COVID-19 and pneumonia and supporting surgical and trauma interventions. Recognized by the World Health Organization (WHO) as a fundamental investment, medical oxygen serves as a linchpin for health systems, enabling various treatments and stabilizing patients.
- In 2023, data from China's Ministry of Finance revealed that public expenditure on healthcare and hygiene reached approximately CNY 2.24 trillion (~USD 316 billion), slightly down from CNY 2.25 trillion (~USD 325 billion).
- According to data from the US Centers for Medicare and Medicaid Services (CMS), healthcare spending in the United States is estimated to have risen by 7.5% in 2023 to USD 4.8 trillion, and it is projected to grow by 5.2% in 2024.
- According to data from the Central Bureau of Health Intelligence (CBHI), India witnessed a 47% increase in medical colleges over five years, totaling 704 as of 2023-24. This expansion is set to bolster the oxygen market.
- As per the National Medical Products Administration, as of December 2022, the number of medical device companies amounted to 32,632 in China, which is a 13% increase compared to the previous year's 28,682 companies, impacting the oxygen market positively.
- The World Health Organization's (WHO) resolution on medical oxygen in January 2023 and the establishment of the Global Oxygen Alliance (GO2AL) signal increased global attention to the medical oxygen shortage crisis, which is expected to drive the oxygen market during the forecast period.
- Given these dynamics, a global expansion of the oxygen market seems imminent during the forecast period.
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Asia-Pacific Expected to Dominate Oxygen Market
- Asia-Pacific is poised to dominate the oxygen market, with China leading the way as the region's largest economy by GDP. Both China and India are recognized as some of the world's fastest-growing economies.
- In India, government initiatives and industrial growth are driving the oxygen market. According to the Press Information Bureau (PIB), in 2022, India implemented proactive measures funded through the PM Cares fund in response to the COVID-19 pandemic, setting up 1,222 pressure swing adsorption plants capable of producing 1,750 metric tons of captive oxygen daily. The government's commitment to enhancing medical oxygen generation capacity is boosting the oxygen market in India.
- In May 2023, India's second medical oxygen skill laboratory was inaugurated at the Assam Medical College and Hospital (AMCH) in Dibrugarh. By enhancing healthcare professionals' expertise and understanding of medical oxygen applications, this initiative is expected to foster increased demand for oxygen-related equipment and services, thereby positively impacting the oxygen market in India.
- In China, where coal-based blast furnace–basic oxygen furnace routes dominate 90% of crude steel production, the oxygen demand is significant. Blast furnaces (BF) and basic oxygen furnaces (BOF) contribute substantially to ironmaking and steelmaking capacities, as per World Steel Association data.
- According to the World Steel Association, China ranked 1st globally in steel production, producing 86.4 million tons in August 2023, showcasing a 3.2% increase. India, with a robust steel industry, produced 11.9 million tons, marking a notable 17.4% growth. These steel production figures contribute to the rising demand for oxygen in Asia-Pacific.
- The role of oxygen in the oil and gas industry is related to industrial processes, enhanced oil recovery, and refining operations. The substantial production volumes of petroleum products in India and crude oil in China indicate a consistent demand for oxygen in these processes.
- Japan's oxygen gas production, amounting to approximately 9.58 billion cubic meters in 2022, reflects a slight decrease from the previous year by 1.4 billion cubic meters, as reported by METI (Japan). Despite this, factors like steel production, government initiatives, and industrial processes across the region are contributing to the expectation of steady growth in the oxygen market in Asia-Pacific during the forecast period.
- Furthermore, among all regions, Asia is forecasted to be the source of over 60% of additional oil demand for the production of petrochemicals until 2050. Capacity growth in Asia is not set to slow until 2035, thus creating a strong positive outlook for the market studied. In terms of countries, by 2030, China and India are expected to experience the largest petrochemical capacity additions.
- For instance, India's chemical and petrochemical (CPC) industry was valued at USD 178 billion in 2022, and it is expected to reach about USD 300 billion by 2025. India benefited from the diversification attempts of the global chemical and petrochemical industry, which offers a more lucrative business ecosystem with favorable investment policies.
- The production and refining of petroleum involve various industrial processes where oxygen is utilized. In refining operations, oxygen is employed for enhanced efficiency and to facilitate the removal of impurities from petroleum products.
- India, a significant player in the global pharmaceutical arena, exports to over 200 countries. With a solid R&D foundation, the nation is set to strengthen its pharmaceutical dominance. In the first half of fiscal year 2022-2023, pharmaceuticals saw a 25% surge in FDI inflows, while hospitals and diagnostic centers enjoyed a remarkable 44% growth. The Ministry of Pharmacy also approved 21 FDI proposals for brownfield projects from January to November 2022, totaling a hefty INR 4,681 crore (USD 566.6 million).
- Given these dynamics, the oxygen market in Asia-Pacific is anticipated to witness steady growth in the coming years.
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