Due to the declining demand for piping supply of oxygen, affected by the reduced production of crude steel, the output of co-produced argon has naturally declined.
It has caused sluggish growth in all three major demands for silicon wafers, stainless steel and welding.
With view to the supply side, the output of crude steel in January (2019) amounted to 8.14 million tonnes with a substantial decrease of 9.8% from the same term of last year and a decrease for five consecutive months, according to the statistics of the Japan Iron and Steel Federation.
The main cause of declination is suggested to be the decrease in export to China and slow business for the automobile industry.
Naturally, the piping requirements of oxygen for customers in the iron and steel industry has been proportionally in a decreasing trend, accompanied by the decreased output of argon which is co-produced with oxygen.
For iron and steel, the largest source of argon, concerns are emerging fearing a worsening of declination in the production of argon, but it is clear demand is slow on the whole.
The output of argon in 2018 was 6010.22m inch2 with an increase by 11.9% which is a record high. The consumption in 2018 appeared to be more than 40 million m3 up to 3-4%, which marked over 40 million m3 after long before, reports The Gas Review.
However, compared to 55 million m3 at peak time of 2018, the market still remains shrunken by 20 to 30%.
The biggest factor of such declination is suggested to be the introduction of argon recycling system by some plants of wafer manufacturers. The optimisation of argon consumption in wafer plants may have also caused the declination.
The argon recycling system was once thought to be not advantageous cost wise, but since it was granted for subsidisation of the government the burden to depreciate the facilities has been reduced.
The demand for argon accounts over 80% for three major applications, i.e. pulling of silicone single crystal, AOD steelmaking for stainless steel, and shielding for MAG, MIG welding.