Argon demand has been growing very strongly over the past few years with key markets like fabricated metals, stainless steel, and electronics showing solid growth as the US economy improved and President Donald Trump’s tariffs on foreign steel assisted US steel industry growth.
This strong demand has caused tightness in argon supply across the US, and wind-milling of ASUs to produce the argon driving prices up. Production of argon has always been dependent on large volume oxygen production at ASUs. Previous to the recession, sluggishness in large oxygen-using markets – such as steel – hampered demand for oxygen, resulting in limited oxygen production, and therefore limited argon.
Investments in new or expanded capacity represents millions in capital investment and is based on large and long-term demand drivers for industrial gas products. New ASUs or expansion activity typically results from a need to remedy regional supply issues, or to replace aging and inefficient plants. However, the improving economic landscape has led to an increase in demand for oxygen, nitrogen, and argon across various sectors, especially in chemicals for oxidation processes and manufacturing applications like fabricated metals, primary metals, automotive, and food.
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