Hydrogen Price Trend and Forecast

Hydrogen Regional Price Overview

Get the latest insights on price movement and trend analysis of Hydrogen in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

Hydrogen Price Trend for the Q3 of 2024

Asia

In the Asia region, the hydrogen market witnessed a notable increase in prices during Q3’24. This shift was influenced by a combination of factors, including growing geopolitical tensions, supply constraints, and surging global demand.
 

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The Chinese market experienced the most significant price changes within the APAC region. The interplay between supply, demand, and seasonal variations played a crucial role in shaping the price trends for hydrogen in the Chinese domestic hydrogen market.

Europe

The European hydrogen market also saw a notable price increase in Q3’24. This upward trend was driven by geopolitical tensions and escalating demand. The tightening market conditions impacted pricing, as demand surged, especially in the power generation and industrial sectors. This demand surge, coupled with record export levels and growing sectoral adoption, supported the overall price increase in the European hydrogen market during the quarter.

North America

In North America, the hydrogen market witnessed a significant shift in pricing dynamics in Q3’24, characterized by an upward trajectory. This increase was primarily influenced by a combination of factors, including supply disruptions, weather-related incidents, strong export demand, and fluctuating consumption patterns. This demand surge, along with record export levels and growing sectoral adoption, contributed to the overall price increase observed in the American hydrogen market.

Analyst Insight

According to Procurement Resource, the global Hydrogen market is poised for continued growth, driven by the increasing focus on renewable energy and decarbonization initiatives.
 

Hydrogen Price Trend for the Q2 of 2024

Asia

The hydrogen market in the Asian countries witnessed a significant recovery as compared to the first quarter, with prices moving northwards. In the majority of these countries, the inclining cost of raw materials such as natural gas and crude oil gave appreciable momentum to the hydrogen market. Meanwhile, the domestic players also noted substantial development in the number of overseas orders despite surging freight charges.

This change in the stance of the international players could be attributed to the expanding usage of hydrogen as a fuel and the growing dependence of global industrial activities on it. Therefore, despite escalating logistical challenges, the region received an ample number of overseas as well as domestic orders, extending ample support to the hydrogen price trend during the second quarter of 2024.

Europe

As the European countries shift towards sustainable industrial practices, their demand for hydrogen as a fuel source has showcased a several-fold increase. This was reflected in the pricing patterns of the commodity as well. Throughout the second quarter of 2024, the market received excessive procurement from the downstream clean fuel industries. The countries, although still in the transition phase, have shown significant improvement in adopting green practices. This was further reflected in the import volumes of the commodity as well.

Despite escalating geopolitical tensions, an extension of lead times due to the diversion of the Red Sea route, and a surge in ocean freight charges, the number of import shipments from the Asian countries inclined as the trading sector focused on bridging the gap between supply and demand of the commodity in the region.

North America

Similar to the Asian and European countries, the price trend of hydrogen during Q2’24 noted appreciation. The primary cause of this incline is, however, attributed to the surge in the cost of production based on the cost patterns of its feedstock natural gas. Additionally, the depletion of existing stockpiles and expansion of hydrogen usage in the industrial sector disrupted the supply-demand balance of the market, providing room for traders to increase their price quotations of hydrogen. Further, the supply from several overseas players also remained modest as the trading sector struggled to mitigate the effects of the changing dynamics of the sector.

Analyst Insight

According to Procurement Resource, the price of Hydrogen is expected to move northwards in the forthcoming quarters on the back of substantial demand from the downstream industries as the global industries shift towards more sustainable ways.
 

Hydrogen Price Trend for the Q1 of 2024

Asia

During Q1 of 2024, the authorities reported that the transition towards green hydrogen in Asian countries requires substantial infrastructure and investment. Amid the consumer sector, currently, blue hydrogen dominates the market due to lower costs and support from fossil fuel companies. On the other hand, green hydrogen projects faced a laid-back attitude, both from the production and consumer point of view.

Challenges of the market included high renewable electricity costs and the need for significant economies of scale. Also, to shift towards green hydrogen usage, government support, and collaboration are also necessary, which were slightly on a meek note in Q1 of 2024. The feasibility of this shift also depends on economic factors, including subsidies, carbon pricing, and regulatory frameworks. In the absence of these support factors, the pricing trajectory of hydrogen as a fuel remained on the higher end of the spectra.

Europe

In Europe, the push for hydrogen as a clean energy solution faced several challenges in the first quarter of 2024, particularly regarding cost and regulatory alterations. Despite efforts to decarbonize the economy, the transition away from fossil fuels was hindered by high production costs and limited availability of renewables. Green hydrogen, produced using renewable energy, remained a costly alternative and struggled to compete with cheaper alternatives like blue or grey hydrogen, which are derived from methane.

The regulatory frameworks, such as the Renewable Energy Directive, imposed strict criteria for green hydrogen production, further complicating the downstream landscape. However, initiatives like the EU's Fit for 55 strategy and the EU Emissions Trading System supported an optimistic demand for clean hydrogen. Additionally, progress in defining low-carbon hydrogen from sources like natural gas with carbon capture and nuclear power, transparent pricing, and increased demand incentives accelerated the adoption of hydrogen across Europe in Q1 of 2024, supporting an uptick in the hydrogen pricing trajectory.

North America

During the Q4 of 2023, hydrogen prices surged in North America, further continuing in the Q1 of 2024. This spike in the pricing patterns was due to rising energy costs and increased investment, especially in the US Gulf offshore wind auction. Strong demand from the fuel industry and international markets further boosted market sentiment. There was a slight slowdown in the momentum during the early phase of the quarter attributed to the destocking activities leading to a rise in discounts on bulk purchases by the overseas industries. However, the market rebounded quickly, and the prices regained their northward stance amid rising trading tensions due to the alternation of maritime routes and a rise in freight charges.

Analyst Insight

According to Procurement Resource, the price trend of Hydrogen is estimated to remain on the higher end of the spectrum due to a rise in the cost of production and limited support from government agencies.
 

Hydrogen Price Trend for the October - December of 2023

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Asia

In the past quarters, awareness about the rise in the use of alternative fuels rose in Asian countries. This rise in demand was fueled by fluctuations in the cost of traditional fuels and an uncertain trend in the region's economy. Both the Chinese and Indian government increased their expenditure in the hydrogen fuel sector, which gave the hydrogen price graph a strong momentum.

Further, the South Korean and Japanese hydrogen traders have called for the finalization of contract for difference (CFD) schemes in order to assist the functioning of hydrogen project developers and increase their offtake agreements with potential customers. These initiatives are yet to showcase their effect; however, they have raised the desire of consumers in the hydrogen sector and thus had a positive influence on the hydrogen price trend.

Europe

The fall in the cost of natural gas and electricity has resulted in the fall in the production costs of hydrogen across European countries in the last quarter of 2023. On the other hand, the EU Hydrogen Bank has begun its operations, and in Q4 of 2023, it offered a total spending of €800 million to boost the demand for hydrogen in order to achieve its industrial decarbonization goals. The rising efforts of the government and the rise in consumer preference towards cleaner fuels have resulted in a rise in the fundamental dynamics of hydrogen price trend.

North America

The US government launched a number of initiatives to keep its prices of hydrogen fuel under a designated bracket in order to keep the fuel relevant to all economic classes. On the other hand, the production sector has received surplus investments which has helped the government to achieve its goal of capping hydrogen prices. Not only the investment sector but the shift in consumer preferences has also helped in the upstream movement of hydrogen industries.

Analyst Insight

According to Procurement Resource, the price trend of Hydrogen are expected to showcase stability in the upcoming quarters as the demand from the consumer sector is firm and the number of investments in the sector also seems positive.
 

Hydrogen Price Trend for the July - September of 2023

Asia

The Asian hydrogen price trend experienced frequent market fluctuations during the third quarter of the year 2023. The first half of the quarter was relatively positive compared to the latter half. The initial surge in market trend was attributed to the rise in crude oil prices and an elevated demand from the downstream consumption sectors. Since the natural gas reforming process is widely employed to produce industrial hydrogen, their market behaviors closely align with each other.

The struggle for revival was very evident in the Chinese market, which was reflected in the initially speedy procurement of hydrogen from the steel and oil refining companies at the beginning of the third quarter.

However, as time progressed the hydrogen price graph started falling down owing to the decline in market prices. The demands didn’t rise continuously for the entire span and later stabilized at one point. However, with a regular influx of supplies, the inventory stocks started piling up compelling suppliers to discount the prices. Overall, mixed market sentiments were observed.

Europe

The hydrogen price trend in Europe remained southward facing throughout the said period of Q3’23. With glutted supplies and tepid market offtakes, the hydrogen price index recorded disappointing numbers for the entire period. A fall in upstream costs because of some improvement in regional economic situation also added up to these sliding price trend.

North America

The North American hydrogen market was more influenced by the Asian hydrogen market since the price trend exhibited positive market behavior for the majority of the period. Some reverse fluctuations took place occasionally. However, general market sentiments remained positive.

Analyst Insight

According to Procurement Resource, Hydrogen price trend will continue to fluctuate going forward, given the uncertainties in the downstream demands and the global economy.
 

Hydrogen Price Trend for the First Half of 2023

Asia

In the Asian market, Hydrogen prices struggled throughout the first half of 2023, as the market was observed to be in a constant slump. Dull downstream demands from the consuming sectors were the biggest reason behind bearish sentiments, along with a decline in energy and production costs. After the lockdown was removed, Chinese industries were struggling to revive, but the trade sentiments were generally muted as a war in the European region significantly depreciated the export queries, and the manufacturing activities almost came to a standstill.

During the said period, holidays due to the Chinese Lunar New Year also limited the industrial activities for some time. So, with poor movement in stocks, limited to no queries, adjusted quotations, and declining production costs, the Hydrogen price trend were feeble throughout the said period.

Europe

The European Hydrogen market almost mimicked the Asian Hydrogen market sentiments with lackluster demands and excess supplies. A rapid decline in the upstream costs was the primary reason behind such disappointing market trend. A market release of 30 million barrels of crude oil by America from its strategic reserves changed the situation for this region, as it curbed the dependence on Russian oil to fulfill the energy requirements. Overall, the market performance was very poor.

North America

The American market could not defy the global market trend for hydrogen and sullen trend were observed during the discussed period. With skyrocketing interest rates, the downstream sectors registered fewer demands, and the prices remained in a slump throughout.

Analyst Insight

According to Procurement Resource, not much change is anticipated in the hydrogen market situation going forward as, given the current market conditions, the present inventories will easily be able to cater to whatever demand is posed by the user industries.
 

Hydrogen Price Trend for the Second Half of 2022

Asia

In H2 2022 Hydrogen market in the Asian region had a good start. Good downstream demand kept the hydrogen price prospects elevated. After an initial rise, the hydrogen price trend turned volatile considering the fluctuations in market demand, petrochemical prices, and government-mandated norms. Even with a strong hoarding sentiment during the holiday season in Q4, downstream demand remained stagnant, thereby keeping the price trend for hydrogen on the lower end of the scale.

Europe

Europe witnessed major economic turmoil in 2022 owing to the current Russia-Ukraine conflict. With the Western sanctions on Russian exports, the gas prices took an unprecedented high impacting the hydrogen market directly. But as the year-end approached the supply remained sufficient but the demand dynamics fluctuated with the hydrogen market recording a declining trend with occasional fluctuations.

North America

Hydrogen price trend for the North American market resembled those of the European market for H2 2022. Rising demand and higher energy prices pushed the market reasonably up. But as the energy prices normalized in the last quarter the hydrogen prices too started declining. Overall, demand and supply dynamics stabilized further, and the hydrogen market remained afloat.

Analyst insight

According to Procurement Resource, as the supply chains are normalizing, and energy security is being ensured hydrogen prices are expected to fall further and the declining trend seems to continue for the next quarter as well.
 

Hydrogen Price Trend For the First Half of 2022

The price trend for Hydrogen soared globally throughout the said period. Hydrogen is not immune to the inflationary pressure the other energy sources felt throughout the year’s first fast as an aftermath of surging crude oil and gas prices. In the US, the cost of electrolytic Hydrogen shot up to 16.80 USD/kg due to the high-cost inflation triggered by the energy crisis. However, commercially most of the Hydrogen is still produced from natural gas.

Conventional Hydrogen, also known as grey hydrogen, averaged 10 USD/kg during the said period. The hydrogen producers faced a double whammy of high natural gas prices and staggering electricity prices, which affected their profit margins. Hence, in order to protect the profit margins, the high operating costs were passed to the consumers, thereby inflating the price trend for Hydrogen globally.

Procurement Resource provides latest prices of Hydrogen. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.