Market Overview
The global compressor market size was valued at USD 47.45 billion in 2023. It is expected to reach USD 71.12 billion in 2032, growing at a CAGR of 4.60% over the forecast period (2024-32). The expansion of various industries, including manufacturing, construction, automotive, and mining, is a significant driver for the compressor market. Rapid urbanization and industrialization in emerging economies are increasing the demand for compressors in various applications such as air compression, refrigeration, and HVAC systems.
The primary industries that use compressors are manufacturing, oil and gas, and power generation. Oil and coal are increasingly being replaced by gas as the primary fuel for transportation and power generation. Companies and governments worldwide are anticipated to concentrate on investing in expanding the gas infrastructure to meet the rising demand for gas. The compressor industry will grow as a result shortly. However, due to the global trend toward adopting cleaner fuel for energy production and consumption in response to the growing concerns about air pollution and global warming, increasing penetration of renewable energy sources like solar and wind is expected to hamper the demand for compressors during the forecast period eventually.
Highlights
- The positive displacement segment is the major contributor to the market by type.
- The power segment is the most significant contributor to the market by end-user.
- Asia-Pacific is the most important revenue contributor by region.
Market Dynamics
Global Compressor Market Drivers
Soaring Demand from the Natural Gas Sector
The natural gas need is expected to increase by 1.7% year over year in 2025, with consumption reaching 4,000 billion cubic meters (bcm) by 2022. Asia-Pacific is one of the regions with the fastest growth rates globally and is anticipated to increase global consumption. According to the International Energy Agency, India is expected to exhibit a speed of about 9% year through 2024. (IEA). There will be a 25 billion cubic meter (bcm) rise in natural gas use nationwide. This scenario is based on the advantages of using natural gas instead of coal and oil for industrial purposes, such as generating electricity and heating buildings, which reduces air pollution and CO2 emissions.
Amid broad initiatives to decarbonize burgeoning economies and diversify the world's energy supply, natural gas is increasingly replacing coal and nuclear power. The exploitation of new natural gas sources, such as shale gas reserves, and the ensuing price pressure are driving the natural gas trade on a global scale. As a result, the quantities of transit and storage will rise during the projection period.
Global Compressor Market Restraint
Wind Power Annual Installations
There will be 709.67 GW of installed solar PV power, up from 482.91 GW in 2018, a 46% growth. That represented the most solar energy established in a single year and an increase of roughly 698.5% between 2012 and 2020. The declining cost of solar technologies significantly fuels the growth in installed capacity. The introduction of environmental legislation has also pushed businesses to use solar energy, fueling the industry's expansion. The federal of the United States has provided several incentives for purchasing and installing home solar PV panels, and each state government has its feed-in-tariff (FiT) programs for producing and distributing solar energy.
The cost of goods is falling due to ongoing technological breakthroughs like increased solar PV module efficiency. These highly modular technologies have been industrialized, which has led to economies of scale, higher competitiveness, better production processes, and competitive supply chains. The outstanding feed-in tariff policies of nations like Germany are also responsible for the general decline in solar PV system costs.
Global Compressor Market Opportunities
Growing Demand in Refinery and Petrochemical Sector
It is anticipated that additional capacity will be added soon, causing it to grow faster than demand. The establishment of a refinery is a capital-intensive venture that calls for industry knowledge, experience, and increased regulatory pressure. Compressor manufacturers may see their market share growth due to the different governments enacting beneficial policies and a rise in foreign direct investment (FDI) in numerous industries, such as petrochemicals, natural gas, and refineries. In addition, the Mexican government announced a proposal to invest over USD 14 billion in Pemex's refining operations in February 2020. An increase in investments aims to transform the nation's simple refineries into complex ones, advancing the ability to process heavy crude oil.
Regional Analysis
Asia-Pacific Dominates the Global Market
The global compressor market is bifurcated into four regions: North America, Europe, Asia-Pacific, and LAMEA.
Asia-Pacific is the most significant revenue contributor and is expected to exhibit a CAGR of 4.05% during the forecast period. China has committed to expanding its oil and natural gas pipeline system over the next ten years to increase the proportion of clean fuels in its energy mix. The demand for compressors is anticipated to increase over the projected period because they are one of the essential equipment used to power long-distance natural gas pipelines. To build a more cohesive national gas network and boost the country's gas consumption, the Chinese central government merged various pipeline businesses to become PipeChina in October 2020.
North America holds a significant place in the compressor market. When energy demand is high, such as during cold and hot weather, or when pipeline supply capacity is limited or insufficient to meet the increased need for natural gas by other consumers, certain power stations in the United States store natural gas on-site as LNG. The liquefied natural gas is then stored in cryogenic tanks after being taken from natural gas pipelines and liquefied on a modest scale. As of 2021, more than 110 LNG facilities were operational in the US, according to the Federal Energy Regulatory Commission (FERC). Additionally, it is anticipated that the new LNG liquefaction trains at Sabine Pass and Calcasieu Pass in Louisiana will begin operating by the end of 2022.
Germany plans to develop renewable energy infrastructure to comply with the Paris Climate Agreement, which aims to maintain the rise in global temperature to 2 degrees Celsius above pre-industrial levels and to put further efforts to restrict the temperature increase to 1.5 degrees Celsius. A rise in the use of gas for power generation is being caused by the rising emphasis on using clean energy. Despite having a green energy policy, coal and lignite accounted for around 25% of Germany's primary energy generation in 2020. The nation is making a concerted effort to phase out nuclear power and coal/lignite-based power plants and plans to shut down coal/lignite-based thermal power facilities by 2038. Renewables are unlikely to keep up with the country's nuclear, coal, and lignite-based thermal generating capacity phase-out.
In 2020, Saudi Arabia had a rise in gas production. The nation produced 111.2 billion cubic meters of natural gas in 2019 and 112.1 billion cubic meters in 2020. The outcome results from COVID-19's rebound in energy demand and stable gas prices. The nation has recently implemented several gas production projects that extensively utilize gas compressors. Siemens Energy was awarded a contract by Saudi Aramco in February 2021 to deliver new electric motor-driven compressors for the Tanajib plant's facilities. The 21 compressors are anticipated to be used for high pressure, high BCom pressure (HHP) injection, sales gas, refrigerant, and sour-off gas compression processes in gas treatment plants.
Segmental Analysis
The global compressor market is segmented by type and end-user.
The global compressor market is bifurcated based on type into positive displacement and dynamic.
The positive displacement segment is the major contributor to the market and is estimated to exhibit a CAGR of 4.25% during the forecast period. Regardless of outlet pressure, positive displacement compressors operate with a constant flow. Positive displacement compressors include scroll compressors, rotary screw compressors, rotary vane compressors, and reciprocating piston compressors. The need for rotary compressors is the driving force behind the development of this market. Positive displacement compressors are extensively utilized in many industries, including automotive, petrochemical, oil and gas, maritime, food and beverage, etc. Additionally, throughout the projection period, oil-less positive displacement compressor technology advancements with the integration of control systems for improved management are projected to boost the positive displacement compressor in many additional industries.
Based on their axial or radial architecture, dynamic compressors are divided into different categories and operate at constant pressure. Environmental factors, such as variations in inlet temperatures, impact dynamic compressor performance. The majority of heavy compressors are comprised of dynamic compressors. They are also referred to as turbocompressors. Radial centrifugal compressors are those with centrifugal design. Due to their low compression ratio and consistent operating conditions, dynamic compressors are thought to be suited for massive gas flows. They are extensively utilized across the oil and gas industry to process gas services in petrochemical and oil refineries and enhance natural gas in pipelines. They are also used in numerous upstream applications, such as FPSOs.
Based on Technology, the global compressor market is bifurcated into Oil-free compressors and Oil lubricated compressor.
Oil-free compressors are a type of positive displacement compressor that does not use oil for lubrication instead, they use alternative lubrication methods, such as dry-running pistons or non-contacting bearings, to ensure efficient operation without oil. This technology is very useful in industries that require high air purity, such as healthcare, food & beverage, fertilizer manufacturing, and electronics manufacturing. Oil-free compressors generally require less maintenance, as there is no need to change large quantities of oil or separators, oil filters, etc. Growth of the segment is driven by industrial demand for clean air, and lower maintenance and operational costs. Atlas Copco, Ingersoll Rand, Gardner Denver, Boge Compressor, etc., are key players in this segment.
The Oil lubricated compressor segment is known for its durability and efficiency in various applications. Oil-lubricated compressors use oil as a lubricant to reduce friction and wear between moving parts which increases their durability and performance. Oil-lubricated compressors are commonly used in industries requiring reliability and continuous operation, such as manufacturing, HVAC systems, large-scale refrigeration, automotive repair shops, Construction sites, and the mining industry. Oil-lubricated compressors require regular maintenance to manage oil levels to ensure optimal operation. The increasing industrial activities and durability of oil-lubricated compressors drive the growth of the segment.
Based on end-user, the global compressor market is bifurcated into the oil and gas industry, power sector, manufacturing sector, chemicals and petrochemical industry, and other end users.
The power segment is the most significant contributor to the market. Widespread industrial infrastructure construction is taking place in Asia-Pacific, which is predicted to increase power demand. New power plants are being built all across the region because industrial operations demand a constant power supply. For instance, 80% of the world's new coal power plants will be constructed in five Southeast Asian nations by 2020. Additionally, more than 56 primary power plants with a combined installed capacity of more than 200 MW are scheduled for completion in the Asia-Pacific region by 2020, which is expected to fuel the compressors market in the coming years.
Compressors in this oil and gas segment are important for various applications, such as gas compression, oil extraction, and transportation. They are used to improve the efficiency of drilling operations, refine crude oil, enhance recovery techniques, and facilitate the transportation of hydrocarbons through pipelines. The need for reliable, high-capacity equipment capable of handling harsh environmental conditions & extreme pressures, also improved efficiency, and durability drives the growth of the segment.
The manufacturing sector is a significant segment that includes many sectors that use compressors for a variety of purposes such as powering pneumatic tools, delivering compressed air for manufacturing operations, conveying, and supporting cooling & refrigeration systems. They are used in a variety of industries, including automotive, electronics, food and beverage, and textile. The growth of the segment is driven by the need for reliable and energy-efficient solutions to support production lines and improve overall process efficiency. Compressors are essential in chemical and petrochemical facilities for operations including air supply, refrigeration, and gas compression. They facilitate the safe transportation of bulk chemicals within facilities, preventing leaks and ensuring high-pressure storage. Increased production capacities and durability drive the growth of the segment.
Compressors in the healthcare industry are important for powering medical devices like ventilators, dentists, anaesthesia machines, and diagnostic imaging equipment. They also play an important role in ensuring the effective operation of HVAC systems in hospitals and clinics, which is necessary for establishing a controlled and sterile environment. The healthcare industry uses oil-free compressors as they provide pure air, and minimize noise. Technological advancements such as energy efficiency and noise reduction, and the need for enhanced healthcare infrastructure drive the growth of the segment.
