Surging Demand for Carbonated Beverages Bolsters Liquid Carbon Dioxide Prices in the US Market

The demand for carbonated drinks continued to rise in the US market post and approaching the festive season. Major facets impacting the price dynamics of Liquid Carbon Dioxide include the price range of natural gas (upstream), volume extracted from the midstream industries (as a by-product from petrochemicals), and the demand outlook from the downstream (brewing, food, and beverages) industries. For industrial gas producers and distributors, staying attuned to the changes is vital for adapting to shifting landscapes as the demand for the commodity surpassed the anticipated range. The final prices of Liquid Carbon Dioxide ranged between USD 640 and 740 per MT, DEL Illinois, in the USA in the mid-Q4 of 2023.

The craft brewery sector has experienced a remarkable surge in North America and globally in the past few months. This growth has opened fresh possibilities for meeting the escalating gas demands of these breweries, as numerous new operations continue to launch each year in the US market.

Several factors, such as a substantial decrease in natural gas prices, the retirement of coal plants, and increased cooling demand in specific regions, led to a rise in the price of Liquid carbon dioxide. In contrast, the percentage of coal-fired generation declined during the same period. This trend coincides with environmental policies at both the federal and state levels, posing notable challenges to coal within the power sector in the United States.

Liquid Carbon Dioxide (CO2) plays a crucial role in the processing and packaging of food. In the US markets encompassing all forms of Liquid Carbon Dioxide (CO2) supply, the food and beverage (soft drink, alcoholic, and non-alcoholic) sector constitutes 70% of the supply of higher-purity merchant Liquid Carbon dioxide (CO2).

On a broader scale, both in the US and globally, there is a notable increase in demand for dry ice, driven by the rising popularity of frozen foods and its expanded usage in cold chain transportation, and is expected to continue the high demand for Liquid Carbon Dioxide in the US market. As the demand for dry ice continues to rise, maintaining quality becomes paramount, and this is a commitment demonstrated in the day-to-day operations.

Evidence indicates that the type of market structure plays a role in the transition from coal to gas. Specifically, in regions with liberalized markets, the replacement of coal with natural gas is occurring more rapidly compared to regions where utilities are vertically integrated. As per ChemAnalyst, the increased demand for Liquid Carbon Dioxide will overrule the market dynamics, and retailers will continue to grab the opportunity to gain higher profits by raising Liquid Carbon Dioxide prices.