Within the US merchant carbon dioxide (CO2) market, changes to patterns in CO2 sourcing and changes in demand regionally, continued to reshape the business in 2019 as they have over the past decade.
The CO2 business is comprised of industrial gas companies and specialized CO2 producers and distributors which supply merchant liquid and dry ice to a wide variety of CO2 markets including food, welding and cutting, and oil and gas. US merchant CO2 represents about $1.5bn in sales per year.
By the end of 2019, US nameplate (NP) CO2 capacity is estimated to reach 37.0 thousand tons per day (ktpd), an increase of 4% from 2018, but only about 0.6% per year over the past 12 years. This lower capacity growth is not keeping up with CO2 demand which is growing closer to 2.5% per year. The result is tight supply during times of planned and unplanned plant outages and seasonal demand spikes and price increases. Four new sources with a total of 1.4 ktpd have or are slated to come on-stream in 2019. Several of those sources will be on by mid-2019, in time to help alleviate the high demand of summer. Players need to strategically plan for future sources of CO2 to alleviate tight supply and plan to supply future growth. In US, rail transport is critical to bring product from surplus locations to deficit locations and to back up sources when supply is variable.
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