Presence of a copious number of OEMs and raw material suppliers has made the competitive landscape in the global market for cryogenic tanks highly fragmented. However, at the regional levels, the market is consolidated due to the presence of one or two dominant players. Driving the demand in the market has been the increased applications of a number of industrial gases and the massive increase in production and consumption of liquefied natural gas (LNG). The growing production of LNG will continue stimulating growth in the market in the next couple of years as well.
Posing a roadblock to the growth in the global market for cryogenic tanks is the relatively steep manufacturing costs on account of the use of cutting-edge technology, specific components, and skilled manpower. Strict quality and safety related guidelines pertaining to manufacture and sale of cryogenic tanks also adds to their cost, thereby crimping their swift uptake.
Use of Cryogenic Tanks in Transportation Seeing Steady Upswing due to Rapid Industrialization
The different types of cryogenic tanks available in the market are liquefied natural gas (LNG), oxygen, nitrogen, and argon. Of these, the LNG segment dominates the market. In 2015, it accounted for a significant share in the overall sales revenue. This is primarily on account of substantial upswing in production, consumption, and trade in LNG. The nitrogen segment came in the second position by accounting for half share in terms of sales revenue.
Depending upon application again, the global market for cryogenic tanks can be split into storage and transportation. Among the two, the storage application segment leads the market because of the widespread use of cryogenic tanks for both short term and long term storage of industrial gases and LNG. In fact, the segment accounted for a good share in the market in 2016.
The transportation segment, however, has been witnessing an upsurge in demand on account of burgeoning production of LNG across established and emerging oil and gas producing countries and the swift pace of industrialization, particularly in developing economies. Considered to be the best option for the transportation and distribution of different types of liquefied gases and LNG, the future of the transportation application of cryogenic tanks looks promising.
From a geographical standpoint, Asia Pacific accounts for a dominant position in the global market for cryogenic tanks in terms of sales volume and revenue. In 2016, the region accounted for over 25% of the total number of cryogenic tanks sold worldwide. Revenue-wise, North America and Europe together contributed over 40% of the overall revenue globally in the same year.
Going forward, Asia Pacific is slated to increase its dominant share in the global market for cryogenic tanks by clocking a robust CAGR by next ten years. This is mainly on account of rapid industrialization, mushrooming of manufacturing facilities for cryogenic tanks, and a marked rise in the consumption of LNG. The Middle East and Africa are other key markets that will likely exhibit a healthy CAGR as well. The increasing production of LNG in the countries of the Middle East as well as in Africa will boost the sales of LNG cryogenic tanks in the region.