Oxygen: Cycles

How India's 2021 oxygen crisis unfolded

Oxygen does not trade on a spot market and prices are not public. Tonnage oxygen is sold on 15-20 year contracts with power cost pass-through, so supplier margins are stable. Merchant liquid prices move with power and with demand shocks: the 2021 medical surge in India and Europe's 2022 power crisis, when gas companies added energy surcharges. The listed gas majors show the stability: Linde's sales grew from $33.0 billion (2024) to $34.0 billion (2025) through a weak industrial cycle.

India May 2023: contract 8.11 cents per Nm3 against off-site cash cost 3.53 cents per Nm3, a margin over cash cost of about 4.6 cents per Nm3 (about $32/t) (Intratec).

Booms and busts

1. April-May 2021 (India)

   Covid second wave raised medical oxygen demand to nearly 9,000 t a day. The government diverted steel-plant oxygen, ran Oxygen Express trains (35,500 t by June 2021) and airlifted tankers.

   NPPA capped liquid medical oxygen ex-factory prices (2020-21, indicative); market prices not public

2. 2021-2022 (Europe)

   Power prices rose with gas. Gas companies added energy surcharges and passed costs through contracts.

   World Bank Europe gas rose from $7.27/MMBtu (Jan 2021) to $70.04/MMBtu (Aug 2022); oxygen price series not public

3. 2022-2023 (India)

   Prices eased as demand normalised and new capacity came in.

   India contract oxygen fell 6% year on year to 8.11 US cents per Nm3 (May 2023, Intratec)

What drives the cycle

• Steel output. Steel is the largest user; BOF and blast furnace oxygen rise with Chinese and Indian steel production.
• Power prices. Electricity is half or more of cash cost, so power tariffs set merchant prices and margins.
• Coal gasification and chemicals investment. China's coal-to-chemicals and India's Talcher project create large new tonnage demand.
• Health shocks. Pandemics can triple medical demand within weeks, as India saw in 2021.

Metrics to track