In the second half of 2026, the operating rates of new energy, fine chemical, metallurgical, and grain storage industries have steadily recovered.

In the second half of 2026, the operating rates of new energy, fine chemical, metallurgical, and grain storage industries have steadily recovered. As essential bulk industrial gases, liquid oxygen (LOX) and liquid nitrogen (LIN) continue to maintain rigid downstream market demand. Many factory procurement and production managers are facing a key question: with continuous rigid industrial consumption, will liquid oxygen and liquid nitrogen prices experience a sharp overall increase?

Based on the latest industrial gas supply chain data and air separation capacity layout, the conclusion is clear: a nationwide and continuous price surge is extremely unlikely. However, regional supply shortages and periodic price spikes will become normalized. The market will continue showing a structural trend: sufficient overall capacity but imbalanced regional supply and demand.

1. Demand Side: Rigid Consumption Supports Price Bottom, No Explosive Growth

The downstream applications of liquid oxygen and liquid nitrogen are highly resilient, providing stable market support with no risk of rapid demand decline.

Liquid Oxygen is widely used in steel smelting oxygen-enriched combustion, metal cutting, chemical oxidation reactions, and industrial wastewater treatment. Traditional manufacturing steady operation forms a solid fundamental demand base.

Liquid Nitrogen holds more incremental growth potential. It is indispensable for lithium battery material sintering, metal cryogenic treatment, controlled atmosphere grain storage, chemical inert purging, and biomedical low-temperature preservation. The booming new energy sector keeps long-term nitrogen demand rising steadily.

Currently, most downstream industries focus on stable production and cost control rather than large-scale capacity expansion. The growth of gas consumption is gradual and stable, which can only support the market price bottom instead of driving a nationwide price skyrocketing.

2. Supply Side: The Core Factor Determining Price Fluctuations

In recent years, almost all industrial gas price surges are caused by supply-side disturbances rather than demand growth. Air separation units are high-power energy-consuming equipment with unstable output affected by seasons, power costs, and maintenance cycles.

Seasonal production limitation: Extreme high temperature in summer and low temperature in winter force air separation plants to reduce operating load, directly cutting liquid gas output and tightening local supply.

Centralized equipment maintenance: The second half of the year is a peak maintenance window for air separation equipment. Multiple core units shutting down simultaneously will instantly cause regional supply shortages and push up short-term gas prices.

Logistics restriction: As hazardous chemicals, LOX and LIN have limited transportation radii and high logistics costs. Cross-region gas allocation cannot respond quickly to local shortages, resulting in obvious price differentiation across different regions.

In addition, fluctuating industrial electricity prices directly affect air separation production costs, forming a solid price floor for liquid industrial gases and limiting downward market space.

3. 2026 H2 Market Forecast: Volatile Trend with Obvious Regional Differentiation

Thanks to continuous investment and commissioning of new large-scale air separation projects in recent years, China’s overall industrial gas production capacity is sufficient. There is no fundamental condition for nationwide gas shortage or sustained price surge.

Current market data shows that the average prices of liquid oxygen and liquid nitrogen remain in a stable range. Short-term sharp rises or drops lack sufficient market momentum.

The most obvious market feature for the rest of 2026 will be structural differentiation. Regions with concentrated equipment maintenance and booming new energy manufacturing will face periodic tight supply and rapid price increases, while capacity-abundant regions will maintain low and stable prices. One-price-per-region and weekly price fluctuations will become normal.

4. Risk Avoidance Strategies for Industrial Gas Consumers

Facing uncertain liquid gas market fluctuations, passive spot purchasing will continuously increase production costs and supply outage risks. Factories can adopt targeted solutions according to gas consumption scale.

For small and medium consumers: Long-term contract pricing
Sign annual gas supply agreements to lock stable gas sources and fixed prices, effectively avoiding sky-high spot prices during peak seasons and maintenance periods.

For large-scale manufacturing factories: On-site gas generation + centralized gas supply system
For 24-hour continuous production factories in new energy, chemical and heat treatment industries, on-site nitrogen and oxygen generation systems plus cryogenic tank centralized supply can completely reduce reliance on outsourced liquid gas. This solution avoids market price volatility and supply interruption risks while lowering long-term operational costs.