The Sulfur Hexafluoride Market is forecast to reach $351 million by 2025, growing at a CAGR of 5.88% during 2020-2025. Sulfur Hexafluoride is an insulating gas in heavy electrical equipment, such as high voltage cables and circuit breakers and compact substations. Growing product demand as an ideal quenching material in distribution voltage switchgear, linear particle accelerators & generators, high voltage circuit breakers, and radar equipment is expected to drive demand.
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Asia-Pacific dominates the sulfur hexafluoride market owing to increasing demand from applications such as electronics and power industries.
Standard grade SF6 was the dominant product segment in 2018 with a percentage share of 75% as it is used in the manufacturing of switchgear and circuit breakers for power & energy generation plants.
Power & energy application segment accounted for the largest revenue share and is expected to register a CAGR of 6.5% over the forecast period owing to the increasing use of SF6 in high voltage equipment including transformers, switches, and capacitors.
By Product – Segment Analysis
The Standard Grade segment generated the highest revenue in the market by product. There is high demand for the product in the power generation segment due to it being an electrical insulator. After more than a century of rapid growth, global energy demand shows growth slowing and plateauing around 2030, primarily driven by the penetration of renewable energy sources into the energy mix. Electrification across key end uses leads to a doubling of electricity demand by 2050. This is particularly driven by increased demand in buildings and a shift toward electricity as an energy source in road transport. Gas is the only fossil fuel which grows its share of total energy demand until 2035, albeit at declining growth rates, and then plateaus; even when considering significant sensitivities, gas demand remains robust within a +/-3% range. Despite a doubling of global GDP (in real terms) between 2016 and 2050, the global primary energy demand will only grows 14%. Electricity consumption will double until 2050, while renewables make up over 50% of generation by 2035.
By End-Use Industry – Segment Analysis
The power generation segment was the major one in the overall market. The world continues to electrify, with around three-quarters of the increase in primary energy absorbed by the power sector. The strong growth of power demand in developing economies helps renewables penetrate, but also creates demand for coal, thereby driving the demand for sulfur hexafluoride. There is growing investment in the power generation industry with the future electricity demand alone requiring an increase in power generation capacity of 26-90%, that is, 2 to 6 TW cumulative installations.
Geography – Segment Analysis
APAC dominated the sulfur hexafluoride market with a share of more than 45%, followed by North America and Europe. The economy of APAC is mainly influenced by the economic dynamics of countries such as China and India, but with growing foreign direct investment for economic development of South East Asia, the current scenario is changing. Countries in South East Asia are witnessing high growth in the aviation and automotive industries. According to OICA, APAC automotive sales witnessed a growth of over 6.52% during 2012-2018, with South East Asian countries having huge potential to grow.
Projected actual growth in APEC is driven primarily by demand growth in China and south-east Asia. In Southeast Asia, growth nearly doubles (98%) driven by rapid economic development as gross domestic product (GDP) per capita rises almost fourfold (from USD 12 247 to USD 44 859) over the Outlook period. In 2016, China represented the largest share (37%) of FED in APEC with 1979 Mtoe, followed by the United States (28%, 1515 Mtoe) and Russia (8.7%, 472 Mtoe). In 2050, China’s share is marginally lower (35%) but grows in absolute terms to 2 332 Mtoe. The United States also has a lower share (26%, 1676 Mtoe) despite moderate growth while growth in Russia barely changes its overall share (8.6%, 565 Mtoe).
Drivers – Sulfur Hexafluoride Market
Rising demand for power generation using Natural gas
Global electricity demand in 2018 increased by 4%, or 900 TWh, growing nearly twice as fast as the overall demand for energy. This was also the fastest increase since 2010, when the global economy recovered from the financial crisis. About a fifth of the growth in electricity demand last year can be attributed to weather conditions. Demand for air-conditioning during the summer jumped last year, which ranked as the fourth hottest year on record. Likewise, colder-than-average winters in North America increased the call for heating. Natural gas was the second-largest single source of global electricity generation and grew by almost 240 TWh, nearly as much as coal. Most of the increase came from the United States, where gas-fired generation rose by 15% to overtake coal as the largest source of generation.
Challenges – Sulfur Hexafluoride Market
Growing demand for solar power generation
By the end of 2018, global cumulative installed PV capacity reached about 512 gigawatts (GW), of which about 180 GW were utility-scale plants. This represented a growth of 27% from 2017. Although capacity additions remained flat in 2018, solar PV generation increased 31% in 2018, and represented the largest absolute generation growth (+136 TWh) of all renewable technologies, slightly ahead of wind and hydropower. This is hampering the demand for sulfur hexafluoride in the non-renewable power generation segment.
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Sulfur Hexafluoride market. In 2018, the top five players accounted for xx% of the share. Major players in the Sulfur Hexafluoride Market are Praxair, Honeywell, Matheson, Linde Group, Advanced Specialty Gases, Concorde Specialty Gases, Kanto Denka Kogyo, Qinghai Xinhe, Showa Denko, Fujian Shaowu Yongfei, Huaneng Fluorin, Solvay, Yingde Gases, Airgas, Chengdu Kemeite, Fluoride Liming Research Institute, and Shandong Ruihua, among others.
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