What is Hydrogen? and the Price Trend-Forecast

Hydrogen is a clean alternative to methane, also known as natural gas. It’s the most abundant chemical element, estimated to contribute 75% of the mass of the universe.

Here on Earth, vast numbers of hydrogen atoms are contained in water, plants, animals, and, of course, humans. But while it’s present in nearly all molecules in living things, it’s very scarce as a gas – less than one part per million by volume.

Hydrogen can be produced from a variety of resources, such as natural gas, nuclear power, biogas, and renewable power like solar and wind. The challenge is harnessing hydrogen as a gas on a large scale to fuel our homes and businesses.

Hydrogen Price Trend and Forecast

North America

In the North American market, Hydrogen prices witnessed a declining trend throughout the fourth quarter of 2022 due to fluctuating natural gas prices. Production levels remain firm in the USA as the demand for green Hydrogen rose. The PEM electrolysis strategy has been more economical than natural gas production. Despite the falling costs of natural gas and oil, which caused high domestic market prices, Hydrogen use soared. The demand from fertilizer and food sectors remained stagnant in the market at the start of the quarter. Towards the quarter’s end, the holiday and the occurrence of storm Elliot hampered the operational rate of Hydrogen in the domestic market. As a ripple effect, the Hydrogen (PEM Electrolysis) prices for FOB California (USA) settled at USD 6746/MT.

Asia Pacific

During the fourth quarter of 2022, Hydrogen gas prices followed the stagnant trend in the APAC market on downstream demand. The domestic market’s fluctuations in natural gas prices had a proportionate effect on the cost of production. The Indian holiday season also caused a slowdown in consumption and production. The Indian government has set key goals for the production and consumption of green Hydrogen. India uses Hydrogen as its primary energy source, and in the middle of the quarter, the demand for Hydrogen in the global market was also rather low. Green Hydrogen would become economically competitive with natural gas-derived Hydrogen, claims the Indian government’s paper, Harnessing Green Hydrogen as an Opportunity for Deep Decarbonization in India. Customers’ modest demand for the product negatively impacted hydrogen pricing in the Indian market.

Europe

In the European market, Hydrogen prices witnessed a declining trend in the fourth quarter of 2022 due to fluctuating Natural Gas Prices. Hydrogen demand in the Netherlands market was modest in starting quarter and declined towards the quarter end. The Netherlands market witnessed a train strike towards the quarter end, hampering the demand-supply chain. The energy crisis affected nations in Europe. The producers could supply feedstock; therefore, there was not much demand from end users. The nation’s need for oil and fertilizers remained high in the domestic market. Production rates remained steady throughout the quarter owing to stable volume offtakes from the downstream market. The amount of stock in the market stayed the same. In November, the supply forecast was not particularly favorable. Thus, the discussions of Hydrogen PEM (Inc. Capex) prices for DEL Rotterdam (Netherlands) settled at USD 20875MT.