For the Quarter Ending March 2024
North America
In Q1 2024, the North American Hydrogen market displayed a lukewarm performance, marked by stable to declining prices compared to the same period last year. This softening can be linked to several factors. Firstly, abundant inventories coupled with weak demand, particularly from the fuel sector due to seasonal reasons, put downward pressure on prices. Additionally, stable energy costs and lower production expenses contributed to a stagnant market with lower prices.
The USA witnessed the most significant price changes, with a decline of 11% compared to the previous quarter. However, unlike the price drop, demand from the fuel sector remained steady, prompting consistent inquiries from downstream industries. The market also expects a price increase driven by restocking activities.
Looking ahead, analysts anticipate a rise in demand, especially from the fuel sector, potentially leading to more inquiries. Import prices, particularly from China, are also expected to hold firm, impacting production costs. Furthermore, the market foresees insufficient inventories amidst anticipated robust demand, potentially pushing prices higher.
In conclusion, the Q1 2024 North American Hydrogen market witnessed a negative pricing environment driven by factors like high inventories, subdued demand, and stable energy prices.
APAC
The pricing environment for Hydrogen in the APAC region in Q1 2024 has been declining overall. There have been several factors that influenced market prices during this quarter. In India, the prices of Hydrogen have shown declining trends, with no significant changes in market dynamics. This stability can be attributed to the weak cost support from the feedstock Natural Gas and the availability of ample inventories in the market. The demand from downstream industries, particularly in sectors like fertilizer and fuel, has remained low, limiting overall market growth. Additionally, the prices of imports from China have decreased, further suppressing market prices. Looking specifically at India, the prices of Hydrogen have exhibited stable trends throughout the quarter.
Demand from the downstream industry, particularly in the fertilizer sector, has remained subdued compared to pre-pandemic levels. However, there are expectations of a potential increase in prices due to escalating seasonal demand and a rise in feedstock natural gas prices.
In terms of seasonality, the demand for Hydrogen in the fertilizer industry is expected to pick up during the sowing season for Kharif crops. However, overall demand from the downstream industry is not anticipated to experience significant growth.
In conclusion, the pricing environment for Hydrogen in the APAC region, particularly in India, has been stable in Q1 2024. Factors such as weak demand from downstream industries and the availability of ample inventories have influenced market prices.
Europe
In Q1 2024, the European Hydrogen market faced a downturn due to surplus inventories, resulting in discounted prices, while the Netherlands showed potential for price increases. Despite subdued demand from most downstream industries, the fuel sector remained robust, indicating sustained demand. Anticipated increases in import costs, particularly from China, are expected to drive prices up in the Netherlands. Additionally, a resurgence of restocking activities and potential hikes in natural gas prices could raise production costs, with a projected supply gap tightening market condition. The pilot auction under the European Hydrogen Bank for renewable hydrogen production attracted 132 bids from projects across 17 European countries, far exceeding the €800 million budget provided by the Innovation Fund.
Lower electricity prices contributed to reduced production costs, which could create positive market development, but the continued high interest rate subdued the purchasing power of downstream industries' consumers.
Moreover, high inventory levels continue to suppress the Hydrogen market in Europe, painting a pessimistic long-term market outlook for the time being.
For the Quarter Ending December 2023
North America
The North America hydrogen market in Q4 2023 experienced several factors that impacted prices and market dynamics. Firstly, rising natural gas prices led to increased production costs, resulting in higher overall expenses for hydrogen production. Additionally, market inventories remained relatively low, leading to premium prices for hydrogen. The slow development of the market and regulatory framework, along with escalating costs, fostered negative market sentiments despite steady demand from the international market.
It is anticipated that hydrogen prices will soon decline. In terms of plant shutdowns, no major shutdowns were reported during this quarter.
Focusing specifically on the USA, hydrogen prices showed a bullish trend in Q4 2023. This was primarily influenced by elevated energy costs due to higher natural gas prices and increased investment activities.
The USA Department of Energy made significant strides in establishing a clean-hydrogen economy by selecting seven regional winners to receive funding for hydrogen hubs. While this diversified approach broadens the toolkit and provides reasons for optimism, it has drawn criticism for supporting hydrogen derived from methane with carbon capture. Analysing the price trends, the current quarter saw a 16% increase in hydrogen prices compared to the previous quarter. Furthermore, the price of hydrogen in the USA decreased by 22% compared to the same quarter last year. However, there were no significant price changes between the first and second half of the quarter. The quarter-ending price for hydrogen in the USA was USD 4830/MT FOB California.
Europe
The fourth quarter of 2023 witnessed significant developments in the European hydrogen market. Firstly, market sentiment was influenced by rising production costs due to the increase in natural gas prices. This led to higher overall expenses and premium prices for hydrogen. Secondly, the market experienced a slow development of the regulatory framework, causing negative sentiments among market participants. Lastly, despite a steady demand from the international market, the slow market development and escalating costs contributed to the anticipation of a decline in hydrogen prices. In the Netherlands, the market showed a bullish trend, driven by increased investments in the hydrogen sector and collaboration with other countries. Germany and the Netherlands signed declarations of intent to strengthen their collaboration in the hydrogen sector, focusing on infrastructure and import. Additionally, the Netherlands launched a subsidy scheme for smaller electrolysis projects, aiming to produce hydrogen with sustainable energy. These initiatives, along with a stable flow of imports, contributed to positive market sentiment in the country. The price of hydrogen PEM (Inc. Capex) DEL Rotterdam in the Netherlands for the current quarter is USD 7220/MT. This represents a percentage change of -62% compared to the same quarter last year and a percentage change of 11% from the previous quarter of 2023.
APAC
In Q4 2023, the hydrogen pricing landscape in the Asia Pacific region remained complex and fragmented. Hydrogen, existing in varied forms such as grey, blue, and green, had different pricing mechanisms. Grey hydrogen, dominant currently and produced from fossil fuels, had prices influenced by natural gas costs, varying across the region due to local gas prices and import dependencies. Blue hydrogen, produced with carbon capture and storage, had limited volumes and was priced considering both grey hydrogen production costs and CCS technology costs. Green hydrogen, in early stages and produced from renewable energy through electrolysis, was priced based on renewable energy costs, electrolyser efficiency, and infrastructure factors Key drivers included fluctuating natural gas prices impacting grey hydrogen, limited green hydrogen production capacity keeping prices relatively high, growing demand in sectors like steelmaking and fuel cell vehicles affecting prices, and government policies like subsidies and carbon pricing potentially influencing pricing dynamics. Regional variations were observed, with Japan and South Korea having high grey hydrogen prices due to fossil fuel dependence, China experiencing lower grey hydrogen prices due to large domestic natural gas production, and Australia having potential for cost-competitive green hydrogen but limited production infrastructure.
For the Quarter Ending September 2023
North America
In Q3, the hydrogen market experienced a positive upswing driven by heightened energy costs resulting from increased natural gas prices and a surge in investment activities. This influx of investments created a favourable outlook, particularly in the U.S. green hydrogen sector, highlighted by the announcement of the inaugural U.S. Gulf offshore wind auction aimed at supporting regional hydrogen initiatives. Furthermore, the downstream fuel industry sustained robust demand, contributing to the continuous pressure on overall industry demand. Globally, markets showcased significant demand, reaffirming a persistent worldwide interest in hydrogen. On the supply side, plants maintained a stable operational pace, ensuring ample inventories to meet downstream demand. Despite these promising factors, it's crucial to acknowledge that the Purchasing Managers' Index (PMI) for the U.S. market remained below 50 throughout Q3, indicating a contraction in the manufacturing sector. This signals a potential area of concern amid an otherwise dynamic and expanding hydrogen market, emphasizing the need for a closer examination of factors influencing manufacturing activities to ensure sustained sector growth.
APAC
In this quarter, the Hydrogen market witnessed mixed sentiments, marked by an increase in prices from July to August followed by a decrease from August to September. The initial uptick can be attributed to the stability observed in the pricing of feedstock natural gas within the country. Furthermore, steady demand from the fuel sector in India has acted as a constraint on the expansion of the hydrogen market within the nation. On the other hand, the subsequent decline in prices can be attributed to the later stability in the pricing of natural gas, resulting in lower production costs. Additionally, demand from the downstream fertilizer industry remained subdued due to the off-season in the fertilizer market. Looking ahead, there are promising developments on the horizon. The guidelines for the R&D scheme under the National Green Hydrogen Mission are set to be finalized by October, with calls for proposals expected to be issued by November. Furthermore, there is a proposal for the establishment of a National Centre for Hydrogen Safety. These forthcoming initiatives are poised to engender positive sentiments in the hydrogen market in the upcoming quarter. A significant development contributing to the market sentiment is the recent G20 declaration by member countries. This declaration emphasizes their collective commitment to promoting the production, utilization, and establishment of transparent and resilient global markets for hydrogen generated through zero and low-emission technologies. This commitment is expected to generate favourable market sentiment in the coming months.
Europe
In the European market, hydrogen prices displayed diverse trends throughout Q3. Despite some fluctuations, they managed to stay within a relatively stable range for the entire quarter. Specifically, prices witnessed a decline from July to August, followed by an increase from August to September. This market behaviour can be attributed to increased investment in the hydrogen sector, creating a positive overall market sentiment. The collaborative efforts between the UAE and the Netherlands in renewable energy and green hydrogen further contributed to this positive development. Additionally, the government is set to launch a subsidy scheme designed to support smaller electrolysis projects dedicated to producing hydrogen with sustainable energy. A substantial allocation of nearly €250 million aims to create 100 megawatts of electrolysis capacity. The objective is to finance 5 to 10 smaller projects across the country, providing various companies and local authorities with valuable experience in electrolysis. This initiative is part of a broader strategy aimed at promoting sustainable practices in the hydrogen production sector. Furthermore, in the Netherlands market, the price of natural gas remained elevated, resulting in higher energy prices. Despite this, the market maintained a stable flow of imports from the international market, with no significant disruptions reported by market participants in the supply chain.
For the Quarter Ending June 2023
North America
The prices of Hydrogen in the USA market have declined significantly, as there was a 6% decrement in prices as of Q2. This decline was mainly due to decrement in the downstream fertilizer industry as there was off-season demand. Furthermore, Natural Gas prices decrement, which declines in input production cost. Additionally, demand from the international market has decremented amid a weak global economic outlook. Furthermore, the rising interest rate has led to an overall pessimistic market view. Additionally, the prices of Green Hydrogen have declined exponentially, as there was a 33% decrement in the prices as of Q2. This decrement was due to low demand from the downstream, like the fuel industry and green ammonia. Additionally, the plants were operating at a lower rate due to weak demand. Furthermore, due to constantly declining prices, there were negative market sentiments, and procurement of new orders was only when demand from the downstream industry. Furthermore, the PMI value for April and June was below 50, indicating a contraction in the manufacturing sector for two consecutive months in Q2.
Asia-Pacific
The prices of Hydrogen declined as of Q2, and there was a sharp decrement in the prices of Hydrogen as of April. Since then, there has been a slow recovery in the prices, which led to an overall reduction in prices in Q2. This decline can be explained by the decline in feedstock Natural Gas prices in April, the slow increment in Natural Gas prices from May and June, and slow demand from the downstream industry like fertilizer. Furthermore, there was an adequate inventory level in the market to meet the demand from the downstream industry. In addition, the coal prices from the Australian market were offered at discounted prices as they were trying to increase market demand which led to a decrement in input production cost. Furthermore, there was a cheap flow of imports from the international market. Additionally, the plants were operating at a lower rate due to weak demand from the downstream industry. Thus, as of ending of Q2 in June, the Hydrogen prices were stated at INR 30048/MT Ex-Dahej.
Europe
There was decrement significant decrement in the prices of Hydrogen as of Q2. This was due to a decline in energy prices as Natural Gas prices reduced which led to a decrement in LNG prices. Additionally, there was a decline in the feedstock Natural Gas which led to a decrement in input production cost. Furthermore, demand from the downstream market has been weak but stable, especially from the fertilizer and power industry which subdued the market growth. Additionally, there were stable imports from the international market and an adequate inventory level in the market amid declining downstream demand. Moreover, plants were operating slowly due to weak domestic demand. Furthermore, PMI for Germany has declined as its value remained below 50 across Q2, indicating a drop in the manufacturing sector throughout Q2. Additionally, the rising interest rate created negative market sentiments. Moreover, due to continuous declining prices, there were negative market sentiments, and procurement of new orders from the downstream industry was on a need-on-demand basis. Furthermore, there was hesitance in the market for the procurement of large orders due to a significant decline in prices.
For the Quarter Ending March 2023
North America
The Hydrogen price trend shifted sentiments during the 1st quarter of 2023. Initially, the price trend was bearish, and the price decreased marginally amid a decline in production costs. However, prices fell specifically during the mid-quarter due to declined orders from the European importers amid surplus availability of feedstock NG and increased production rates. Towards the end of the quarter, the price trend improved, and prices rose due to increased orders from importers amid affected production rates due to volatility in feedstock Natural Gas prices. Conclusively, Hydrogen prices in the USA hovered at USD 6427/MT at the end of the quarter.
Asia
The Hydrogen price trend showcased bearish movement in the Asian region during the 1st quarter of 2023. Initially, prices fell due to reduced demand from strong acids and downstream Ammonia producers amid decreased orders from fertilizer industries. During the mid-quarter, the decline in upstream Natural gas prices due to the temperature rise eased the cost support. Towards the end of Q1, offtakes fell from the energy sector as well with the arrival of the spring season in the region. At the same time, consumption was still weak from downstream industries. Conclusively, at the end of Q1, 2023, Hydrogen prices in India witnessed INR 29670/MT.
Europe
In the European region, the Hydrogen price trend witnessed slumps during the Q1 of 2023. A significant reduction in the upstream Dutch TTF natural gas futures amid surplus availability of Natural gas supplies and a temperature rise eased the cost support. Manufacturers decided to produce Hydrogen domestically rather than importing it from the USA. However, the price trend improved slightly during the mid-quarter amid improved offtakes from the energy sector. At the same time, downstream Ammonia prices fell amid depressed demand from fertilizer producers during the quarter. In the final month of Q1, prices again plunged amid weak offtakes and excess supplies. At the end of the quarter, the Hydrogen prices in the Netherlands hovered at USD 9053/MT.
For the Quarter Ending December 2022
North America
In the North American market, Hydrogen prices witnessed a declining trend throughout the fourth quarter of 2022 due to fluctuating natural gas prices. Production levels remain firm in the USA as the demand for green Hydrogen rose. The PEM electrolysis strategy has been more economical than natural gas production. Despite the falling costs of natural gas and oil, which caused high domestic market prices, Hydrogen use soared. The demand from fertilizer and food sectors remained stagnant in the market at the start of the quarter. Towards the quarter's end, the holiday and the occurrence of storm Elliot hampered the operational rate of Hydrogen in the domestic market. As a ripple effect, the Hydrogen (PEM Electrolysis) prices for FOB California (USA) settled at USD 6746/MT.
Asia Pacific
During the fourth quarter of 2022, Hydrogen gas prices followed the stagnant trend in the APAC market on downstream demand. The domestic market's fluctuations in natural gas prices had a proportionate effect on the cost of production. The Indian holiday season also caused a slowdown in consumption and production. The Indian government has set key goals for the production and consumption of green Hydrogen. India uses Hydrogen as its primary energy source, and in the middle of the quarter, the demand for Hydrogen in the global market was also rather low. Green Hydrogen would become economically competitive with natural gas-derived Hydrogen, claims the Indian government's paper, Harnessing Green Hydrogen as an Opportunities for Deep Decarbonisation in India. Customers' modest demand for the product negatively impacted hydrogen pricing in the Indian market.
Europe
In the European market, Hydrogen prices witnessed a declining trend in the fourth quarter of 2022 due to fluctuating natural gas prices. Hydrogen demand in the Netherlands market was modest in starting quarter and declined towards the quarter end. The Netherlands market witnessed a train strike towards the quarter end, hampering the demand-supply chain. The energy crisis affected nations in Europe. The producers could supply feedstock; therefore, there was not much demand from end users. The nation's need for oil and fertilizers remained high in the domestic market. Production rates remained steady throughout the quarter owing to stable volume offtakes from the downstream market. The amount of stock in the market stayed the same. In November, the supply forecast was not particularly favorable. Thus, the discussions of Hydrogen PEM (Inc. Capex) prices for DEL Rotterdam (Netherlands) settled at USD 20875MT.
For the Quarter Ending September 2022
North America
In the North American market, Hydrogen prices witnessed an up-swinging trend during the third quarter of 2022 amidst the rise in demand for fuel production in the domestic market. Hydrogen prices have risen due to rising energy costs. Hydrogen appears to be sensitive to the inflationary pressures other energy sources have recently faced. Furthermore, as natural gas and oil prices rose, so did the demand for Hydrogen, resulting in high domestic prices as an alternative energy source. Fertilizer demand remained high in the US market, driving up Hydrogen prices. As the demand for green fuel increased, domestic hydrogen production remained constant. The operational rate of hydrogen production from natural gas increased overall costs. Thus, the Hydrogen (PEM Electrolysis) prices for FOB California (USA) settled at USD 7060/MT.
Asia Pacific
During the third quarter of 2022, Hydrogen gas prices showcased a rising trend in the APAC market on the back of firm downstream demand. The PEM electrolysis method used by major players in the Indian market to produce Hydrogen gas keeps production costs stable. Growing demand for clean and renewable energy sources will also drive market growth. Rising concerns about climate change and air pollution drive domestic Hydrogen prices. By 2030, the Indian government hopes to produce nearly 500 GW of non-fossil fuel from green Hydrogen. However, natural gas prices in the domestic market fell slightly in September, affecting the final costs of Hydrogen gas in the Indian market proportionally. Because energy producers have an abundance of Hydrogen, Hydrogen gas prices have fallen slightly. Hydrogen prices for Ex-Mumbai (India) settled at USD 569/MT as a ripple effect.
Europe
In the European market, Hydrogen prices noted an unprecedented surge in the third quarter of 2022 amidst soaring natural gas costs. Prices for Hydrogen production increased due to fluctuations in natural gas and electricity costs caused by global variations in the petrochemicals market. Train and trailer transportation costs impacted market sentiment and variable energy charges. The region's investments in building Hydrogen pipeline infrastructure are slightly increasing, putting cost pressure on the product's prices. Furthermore, the rise in demand for fuel from industries, commercial markets, and transportation influenced market prices. Domestic Hydrogen production remained high, and the operational rate was consistent. Pipelines were used to transport Hydrogen to industries. Thus, the discussions of Hydrogen PEM (Inc. Capex) prices for DEL Rotterdam (Netherlands) settled at USD 21949.55/MT.
For the Quarter Ending June 2022
North America
Hydrogen prices in the American market rose consistently throughout the second quarter of 2022. In the US, Hydrogen is produced by refining steam methane; the primary source of methane is Natural gas. The feedstock natural gas price in the US rose during Q2 2022 because of increased European export amounts. Several European countries sanctioned a ban against Russian oil and Gas imports. The US stepped in to meet Europe’s requirements, raising natural gas prices in the US domestic market, ultimately driving up hydrogen prices in the American market during Q2 2022. The rise in demand for fertilizers during Q2 increased hydrogen price in the second quarter of 2022 as it is used in fertilizer manufacturing.
APAC
In the Indian market, Hydrogen is widely used to manufacture of Ammonia. The demand for Ammonia was rising throughout the second quarter of 2022, driving up the prices of Hydrogen. The upstream Natural Gas price was on an upward trend during Q2 2022 due to tight supply from Qatar and Saudi Arabia. Despite the ease of Natural gas prices during the end of Q2, the cost of Hydrogen remained high due to solid demand from the downstream ammonia manufacturers. The Chinese market also witnessed a hike in Hydrogen prices on account of rising upstream natural gas prices which was caused by the disrupted supply caused by covid-19 related lockdowns and Shipping congestion during Q2 2022.
Europe
Hydrogen prices increased in Europe throughout the second quarter of 2022 due to high energy prices. Europe has less than 2% dependency on Hydrogen for energy prices. However, when the cost of Natural gas, the primary energy source in the continent, spiked during Q2 2022, the demand for Hydrogen increased for energy purposes. The ban on Russian imports also increased hydrogen demand since Ammonia production increased on the continent. Europe’s sanctions against importing Russian oil and gas raised the price of upstream Natural Gas, ultimately increasing the cost of Hydrogen in the European market during the second quarter of 2022.
For the Quarter Ending December 2021
North America
In North America, the prices of Hydrogen were surging during the fourth quarter of 2021, backed by high upstream cost. Hydrogen is mainly produced through steam methane refining process in the US, and the prime source of methane there is natural gas. Since the prices of natural gas was inclining, the price value of methane soared, eventually contributing towards price hike of Hydrogen. Furthermore, the strong demand from the market also supported the upward trajectory of Hydrogen prices. Furthermore, demand fundamentals for the product remained overall stable throughout the quarter, while inflationary pressure kept on concerning the manufacturers.
APAC
The prices of hydrogen were accelerating in the Asian market during Q4 FY21, owing to intensified natural gas prices. Natural gas price hike eventually leads to the higher upstream cost to produce hydrogen, and hence augmenting the price value of hydrogen. Furthermore, newly introduced trade restrictions and higher freight charges also supported the surge in the prices of Hydrogen. In addition, strong demand was another important factor contributing towards the rising price value of hydrogen. The prices of hydrogen in Indian market were assessed to be at USD 472/MT Ex-Mumbai in the concluding month of the year.
Europe
European market witnessed an upsurge in the prices of hydrogen during the last quarter of fiscal year 2021, backed by rising gas prices and weak supply. The prices of hydrogen soared in Europe, owing to higher upstream costs caused by amplifying prices of gas and power. Furthermore, supply was not corresponding with the demand of hydrogen, and hence giving rise to its price value. In addition, sudden economic recovery amid delayed imports from Russia remained a prime factor behind steep price escalation of several commodities including Hydrogen across European market.
For the Quarter Ending September 2021
North America
The North American Hydrogen market showcased mixed sentiments in during Q3 2021. Uncertainty in the domestic market continued to weigh over the demand fundamentals, causing severe price fluctuations across the US region. As natural gas futures continued to stay bullish, producers seemed compelled to plan out operational cuts. Green hydrogen prices remained firm in the third quarter mirroring the previous quarter. The prices of grey and brown hydrogen also witnessed a spike on the back of volatility in the natural gas as well as tightness in the coal market in Q3 2021.
Asia
The Asian Hydrogen demand was high in the third quarter of 2021. Increasing demand for natural gas from the domestic as well as international markets amidst trade disruptions, led to a steep rise in the prices of Hydrogen in the global market especially in Europe during Q3. In India, demand fundamentals for upstream natural gas remained strong from the downstream agrochemicals segment due to scarcity and upcoming seasonal demand in the country. Hydrogen gas price escalated from USD 378/MT to USD 406/MT in Q3 2021. Due to a significant rise in upstream cost, traders were compelled to revise their offers positively in the third quarter.
Europe
During the third quarter of 2021, a major hike was observed in the prices of Hydrogen across the European region. Gas prices were consistently rising in Europe, even before winter demand begins. Skyrocketing Electricity and gas prices around the globe put the entire economy under strong pressure and caused financial trouble for many energy-intensive companies over the short term. Surged demand for green hydrogen from the electricity market led to an increment in Hydrogen prices.
For the Quarter Ending June 2021
North America
Despite of rising feedstock LNG prices in the USA, prices of Hydrogen traced a downward trajectory during Q2 2021. The demand for Hydrogen has been consistently increasing in the global market due to its low carbon footprints. During this quarter, prices of Hydrogen declined due to abundant stock availability and market competitiveness with Saudi Arabia, who were exporting feedstock Hydrogen on a much cheaper rates than USA. Therefore, manufacturers were compelled to reduce the prices to maintain price parity. Therefore, a significant decline in prices was observed during this quarter in USA, which eventually settled at USD 1350/MT during end of June.
Asia
Asian market experienced firm sentiments for Hydrogen during this quarter, as like other countries Asia also has started regarding Hydrogen as clean fuel alternative. In India, prices of Hydrogen kept on rising till the end of April, but later declined in May. Subdued demand from industries under pandemic mayhem in India reduced the prices of Hydrogen effectively, which later rebounded in the month of April. Thus, prices eventually settled at USD 369.2/MT in India during end of June. Besides, China invested a huge amount on Hydrogen, while procuring significant number of cargoes from Saudi Arabia in the meantime.
Europe
This quarter, overall price of Hydrogen remained stable in Europe, backed by firm demand from downstream sectors. Meanwhile, Germany was heard inventing huge amount of money on more than 60 new Hydrogen projects alone, while procuring significant cargoes of feedstock LNG from regional and international market. In addition, regional car manufacturers began researching on Hydrogen fuel cell to keep themselves ahead with the trend.
For the Quarter Ending March 2021
North America
The US freezing storm disrupted industrial activities of the US Texas region for almost two months. Most of the plants were down amidst this winter freeze, it is estimated that, more than 7.37% of LNG output was totally halted due this extreme cold. Hence the production of Hydrogen was also reduced with shortage of feedstock Methane, across the region. Although the domestic demand for Hydrogen remained high, tight supply further supported the prices of LNG.
Asia
The Asian market witnessed a continuous boom in the Hydrogen demand as a fuel, especially in China. China invested a lot in Hydrogen fuel in past couple of years to reduce CO2 emission of the country, and they continued this trend in last quarter as well. Meanwhile, surge in COVID 19 cases in China forced the government to implement partial lockdown across some region, which affected the transportation of Hydrogen and ultimately reduced the availability of Hydrogen in the country. On the other hand, Indian government also announced a big budget of green Hydrogen that enhanced the market sentiments across the country. Although, Panama Canal congestion and surge in import prices halted the availability of Hydrogen in the country which supported the prices. Prices of Hydrogen in Indian market rose from USD 258.83 to USD 310.02 per MT from early January to March ending.
Europe
The European LNG demand remained high amidst winter in addition supply tightness supported the prices cross the region, which directly impacted the prices of alternative Hydrogen in the market. Germany is just behind China in the race of Hydrogen as a fuel for transportation thus its demand in the European region is expected to remain high in forthcoming quarters also. In addition, the prices of feedstock Methane also witnessed prominent ruse due to higher LNG exports to Asia and lower supply from the US Gulf under extreme cold conditions.
For the Quarter Ending December 2020
North America
With the consistent increment in prices of the natural gas, Hydrogen gas prices in the US took an uptrend later in the quarter. The supply of natural gas tightened towards the end of the quarter due to less demand and production cuts due to lower demand. The natural gas prices rose in the fourth quarter due to winter storms and shutting of several refineries which contributed to an overall increase in the price of Hydrogen Gas. Offtakes were less as demand remained affected which went against traditional expectations for the year end.
Asia
Demand for hydrogen gas in the Asian market remained firm as various countries like China and India were heard shifting gears to establish a greener economy in which clean fuel can be used like Hydrogen. Stable price of natural gas accounted for stability in the price of hydrogen gas. The rise in prices of natural gas in Q4 of 2020 due to winter chills in some producing belts, accounted for the rise in price of Hydrogen gas in Q1 of 2021. Towards the end of the year, major economies in Asia were heard shifting towards electrification of vehicles in response to climatic shift. Sentiments were uplifted after in Nov. 2020, the Japanese government launched a 15-year plan to develop its fuel-cell supply chain and hydrogen-powered trucks and buses with the aim of rolling out at least 1 million Hydrogen-Fuelled vehicles by 2030.
Europe
Firm demand for Hydrogen gas from the transportation and refining industry has sustained its rich market sentiments in Europe. As European Union is eyeing for the green economy which accounts for the demand of hydrogen gas, it can be used as a clean fuel in the transportation sector. In early October, market fundamentals of hydrogen gas remained in a narrow range due to economic slowdown and lesser consumption by the end-use sectors. However, the rapid pace towards vehicle electrification in Europe and massive investments in the sector for prospered demand of the Hydrogen Gas.
