Rare gases, which include krypton (Ke), xenon (Xe), and neon (Ne), are byproducts of air separation units (ASUs) that produce large quantities of oxygen and nitrogen. Historically, to be economically feasible, the rule of thumb was that an ASU must produce at least 1,000 tons per day (tpd) of oxygen to be considered for crude rare gas production.
With today’s lower rare gas prices, a plant must produce about 2,000 tpd of oxygen or more to produce enough crude rare gas byproduct to obtain a reasonable return on investment. Only large steel mills and some large petrochemical projects, such as coal and pet-coke gasification projects, require this size of oxygen plant. The time frame to design and build a large ASU that adds new capacity of rare gas crude to the global market is almost three years. This makes trying to balance the supply and demand of rare gases very difficult and results in volatility in pricing and supply. In this report, we examine the worldwide market and outlook for rare gases, with a focus on production, which will be the rare gas product price driver in the short term.
Production
In my last report (“Rare Gases Market Recovers with Global Economics,” Cryo- Gas, March 2011, p. 40), I reported the world production of Kr was about 100 million liters and production of Xe was about 11 million liters. Today I believe actual production is a little less than that with Kr at around 97 million liters, Xe at 10.5 million liters, and Ne at 625 million liters. Coming up with an accurate analysis of rare gas production is difficult, as many plants do not run at a consistent production volume and others never produce the volumes they were expected to. I take these variations into account with my estimates. Errors in estimates tend to overstate production rather than underestimate.
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