Global gas liquefaction movement: leveraging global energy scarcity for profit opportunities
Liquefied Natural Gas (LNG) on the Rise Globally, Including in Industrial Nations like Germany
The demand for LNG isn't just booming in Asia; it's also surging in industrial powerhouses like Germany. Two reigning heavyweights, Air Liquide and Linde, dominate the market and are members of the BÖRSE ONLINE Liquefied Gas Index. The index recently hit a record high, offering investors an opportunity to diversify into this promising sector.
With Russia tightening the gas tap, the significance of natural gas as an energy source for households, businesses, and industry became evident in Germany. LNG, which can be transported by ship or rail, is the only immediately accessible alternative to Russian pipeline gas.
LNG: A Global Mega Trend
Beyond the current geopolitical context, LNG has emerged as a megatrend. Globally, not only the chemical industry covets this raw material for the production of various goods, but many countries rely on LNG due to their geographical locations. Especially in Asia's developing markets, a robust LNG growth market has sprung up. Simultaneously, industrial nations like Germany are still catching up in terms of LNG technology. This presents an investment chance before the gap is closed.
Air Liquide and Linde Lock Horns
A company that has lagged behind in the industry could potentially become a leading player itself. This contender is Air Liquide, which has experienced rapid growth. Historically, Linde has shown superior performance over Air Liquide. However, a glance at the three-year chart reveals a striking development: At the beginning of the year, Linde led by about 30 percentage points, but that lead has shrunk to just 13 percentage points. Air Liquide's positive evolution is attributable to a successful margin strategy and extensive efficiency measures. An extensive restructuring and cost-cutting program have further boosted profitability, enabling the company to achieve savings of 497 million euros - far surpassing the targeted 400 million euros.
Though Linde has also recovered from a rough patch and registered a surge of over 8 percent, the price-to-earnings ratio (P/E) of 27.3 is no longer exceptionally favorable, and the dividend yield of 1.30 % is quite modest. However, long-term investors can still reap the rewards from stable price growth with the Linde stock.
Embracing the Future with LNG
Thus, the LNG industry now has two major players in the spotlight, and the industry as a whole shows a positive trajectory. According to Shell, demand for LNG is projected to surge by approximately 60 percent by 2040. To facilitate investors' smooth and diverse entry into this future-focused market, BÖRSE ONLINE introduced the Liquefied Gas Index. This index comprises, alongside the two giants Air Liquide and Linde, companies like Shell, Cheniere Energy, and Técnicas Reunidas. The index incorporates 18 companies from the LNG industry, offering a broad spectrum of various actors. With impressive results so far, the index has amassed double-digit figures.
Investors who wish to stay ahead of this promising industry may consider investing in the index now—conveniently via WKN DA0ABT. Seize the opportunity to participate in LNG's positive growth and secure a reliable investment option.
A few insights:- Asia remains the largest LNG importer in the world. However, demand in Asia has been relatively sluggish, with lower imports than previous months and a reduction in Chinese imports of 27% compared to the previous year.- In contrast, Europe, led by Germany, is witnessing a sharp rebound in LNG demand, with LNG imports projected to increase by about 25% in 2025.- LNG markets are highly competitive, with cargoes being diverted in response to price shifts.- Major LNG suppliers include companies and national producers from the U.S., Qatar, Norway, and various other key regions.
These trends reflect a near-term tightening for Europe's LNG needs amid a more measured but ongoing growth in Asian demand. Substantial infrastructure investments and long-term supply agreements are crucial for industrial nations like Germany to manage cost and supply risks in this evolving market.
- The demand for LNG isn't limited to Asia; even industrial nations like Germany are seeing a surge in its usage, creating an opportunity for investors to diversify into this promising sector.
- With its geographical location, many countries, including industrial nations like Germany, rely on LNG, making it a global megatrend in the energy industry.
- Even in a highly competitive LNG market, Air Liquide, historically lagging behind Linde, has shown impressive growth, with a successful margin strategy and extensive efficiency measures boosting its profitability.
- As the demand for LNG is projected to increase by approximately 60% by 2040, investors can consider investing in indices like the BÖRSE ONLINE Liquefied Gas Index, which offers a broad spectrum of various actors in the LNG industry, for a reliable investment option in this future-focused market.
