Compressor Market

Market Overview

The global compressor market size was valued at USD 42.80 billion in 2022. It is projected to reach USD 64.15 billion by 2031, growing at a CAGR of 4.60% during the forecast period (2023-2031).  Factors like the soaring demand from the natural gas sector and refinery and petrochemical sector drive the market growth.

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 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.

Similar to how air compressors are used in the production of plastics, air compressors are utilized in the production of glass to power mold presses. The hot glass inside molding cavities is blown with compressed air. Compressors are used, in addition to powering mold presses, to combine different materials before the production of glass and to chill the glass once it has assumed the mold's shape. Compressed air is also used to manufacture metal for hot metal molding, tool driving, spraying, and finishing. Compressors are used extensively in the furniture industry for various tasks, including tool operation, gripping, and air power.

Compressors process olefins/polyolefins, alcohols, urea, polyethylene, ethylene oxide, ethylene glycol, ammonia, aromatics, etc. Process gas compressors are used primarily in the chemical industry for gas compression, refrigeration, preservation, and other specialized process needs and tendencies. The following are some of the uses for process gas compressors in the chemical and petrochemical industries: Gas Compression - Before injecting gases into applications, process gas compressors compress the gases. Material Handling - To reduce the risk of an explosion in volatile situations, fluid pumping systems based on compressed gas are used. Liquid Gas Production (Nitrogen, Argon, etc.) - To produce nitrogen, compressed gas is filtered through a membrane and employed in a variety of chemical processes.

Worldwide plans exist to reduce the cost of fertilizer imports and to increase domestic fertilizer production. Nations like India and China have made significant reforms in the fertilizer industry. One example is India's Make in India effort for the chemical industry. Worldwide, there is a growing tendency toward reopening closed fertilizer facilities and constructing new ones, which is anticipated to assist the compressor market expansion during the forecasting period. In addition, various end-user industries, including pharmaceuticals, construction, etc., are seeing a rise in demand for chemical goods due to increased urbanization and industrialization activities.

Compressed air for braking systems in the automotive sector has given compressors a new use. Compressors must be installed on the vehicle to maintain a steady flow of compressed air. There have been air brakes for a very long time. They were first used for locomotives and then for vehicles after being granted a patent in 1872. Due to their better performance than conventional braking systems and also because of international rules on the stopping distances for different heavy trucks, air compressors have become important. Depending on the service type, service vehicles need a compressor on board more significantly than the brake system's compressor.

Recent Developments

• March 2023- Sapphire Gas Solutions ("Sapphire") and Bauer Compressors, Inc. ("Bauer") announced a national partnership between the two industry leaders. The partnership allowed Sapphire to deploy, construct, and maintain an array of state-of-the-art Bauer-manufactured gas compressors and provide OEM parts servicing multiple critical industries covering Canada, the United States of America, and Mexico. 
• March 2023- Danfoss officially finalized its acquisition of BOCK GmbH, a manufacturer of CO2 and low-GWP compressors. The completion of the acquisition reinforced Danfoss’ position as a preferred destination for greener cooling and heating solutions.