28th October 2021
Lab Gas Price Bulletin - October 2021
The past year has been difficult for many industries; the ongoing ramifications of the COVID pandemic, supply chain disruptions and the closure of the Suez Canal for six days earlier in the year due to the container ship blockage. These issues, as well as many other factors, have led to labs seeing gas price increases as a result.
Gas Price Increases
Labs have been seeing price hikes for gas cylinders for years now and it is only ramping up with the myriad issues that much of the world are currently facing. Air Products, a North American industrial gas supplier, following their price increases last year of 15% on liquid nitrogen and 20% on monthly service charges have, again, increased these prices effective from 1st October 2021. Labs can expect an increase of up to 20% on liquid nitrogen and another increase of up to 15% on monthly service charges.
This has, in the last 12 months, seen labs face a price hike of up to 35% for liquid nitrogen and monthly service charges. With these continued price increases, labs in North America are going to have to increase their budgets for their gas supply to cover ever-increasing costs.
When was the last time you read a news story about decreasing gas prices?
Chart Industries, Inc., a global manufacturer of equipment servicing multiple applications in industrial gas markets, have also raised their base pricing this year by 3-6% as of 1st February 2021. This increase has been said to be “in response to the escalation in product costs in a year where supply chains have been disrupted and productivity efficiency has suffered.”
Chart’s engineered systems are employed in the separation, delivery, storage and end use of liquid gases including nitrogen, oxygen, helium and hydrogen.
Gas Cylinder Price Increases
Norris Cylinder, a North American manufacturer of high pressure steel and acetylene cylinders, on 1st February, implemented a price increase on all products for new order stating that all high-pressure cylinder models will rise by 7% and acetylene cylinders will increase by 9%. Norris Cylinder explained the new price increases “were due to the increases in the cost of steel, components and other key raw materials including acetone…which could no longer be absorbed or outpaced by operational efficiency improvements.”
Worthington Industries, an industrial metals manufacturer based in Ohio, USA, also announced increased prices on non-refillable fuel and specialty gas cylinders in August 2021. Worthington said that “as a result of increased costs in raw materials, labour and transportation, prices will advance with effect of all orders shipping on or after 1st November 2021.”
This news follows the company’s decision to increase prices on some of its steel and aluminium cylinders effective on all orders shipped on or after 1st September 2021.
Supply Chain Disruption
The increased demand for gas as a result of industries starting to bounce back from the initial impact of COVID have had an impact on prices overall. With this increased demand, coupled with production struggling to keep pace, labs have been impacted greatly. These issues have been accompanied by disruptions to the supply chain which have had a knock on effect to the cost of the end product – cylinder prices rising, increases in the cost of shipping due to idle containers, reduced numbers of staff at ports, driver shortages, the closure of the Suez canal earlier in the year, and many other factors have all driven manufacturers to increase the price of their gas.
With supply chain issues forecasted to last, by some experts, well into 2023, this is an extra cost that many labs will need to start factoring in to their annual budgets to try to ensure continuity of work.
On-site Gas Generation for the Lab
Labs do have options though. By taking control of lab gas supply, with a PEAK gas generator, these issues can be bypassed. One upfront payment, along with an annual service contract can see labs gain independence from cylinder dependency. With an in-house gas generation solution, labs have an uninterrupted supply of gas which can not only help with budgets, but it can support a number of lab processes. With an increasing number of labs moving to a lean management system – a gas generator can support this - streamlining processes and removing unnecessary bulk items from the lab, as well as helping to reduce the amount of waste the lab produces.
With a PEAK gas generator, the amount of gas needed for analysis is the amount of gas that is produced. Many generators can be installed in labs and take up minimal footprint. They remove the need for repeated bulk gas deliveries, unsafe handling of cylinders and, in the current climate, unnecessary personnel entering the lab and opening it up to the risk of COVID contact transmission.
With an on-site gas generator, labs can eliminate concerns over constantly increasing gas prices and the uncertainty in the current supply chain, gaining independence and control over their own gas production and costs.
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