Based on Scope’s perception of the industrial gas sector’s protected industry risk – derived from its low-to-medium cyclicality, high barriers to entry and low substitution risk – Scope sees favourable industry characteristics for this specialty chemicals market. The three drivers mentioned above are the main determinants in Scope’s Corporate Ratings Methodology to assess a company’s industry as part of the business risk profile assessment.

Scope has assigned an industry risk of A+ to the industry, which is identical for all the industrial players. The agency sees the major industrial gas companies’ competitive position as having investment grade characteristics throughout. In combination with the industry risk, all five companies assessed (the four majors Linde, Air Liquide, Praxair and Air Products plus Messer in Germany) would have a business risk profile in the A category or higher.

The assessment of the industrial gas companies’ financial risk profiles is based on public information only, apart from Linde. This approach is equivalent to ratings indications and differs from mandated full corporate ratings as inputs exclude both communications with management and financial estimates. The ratings derived, which are all in the solid investment grade area, are thus mere snapshots based on the latest published figures, and results should be interpreted as indications of credit quality only.

Download the full report: 'Industrial Gases Industry: Globally Strong, Regionally Different'.