Air Products and Chemicals (APD) JPMorgan Industrials Conference 2026 summary

Impact of geopolitical conflict and market conditions

• Operations in the Middle East remain largely stable, with only minor plant closures and travel restrictions affecting staff movement.

• European operations face higher energy costs due to the Strait of Hormuz closure, impacting LNG and helium supply chains.

• Energy price surges in Europe are managed through pass-through agreements and surcharges, especially in hydrogen and air separation businesses.

• Merchant business in Europe is most affected by energy inflation, with efforts to minimize lag in passing costs to customers.

• U.S. and European HyCO and refinery volumes have remained strong, with the Americas showing sequential volume growth.

Helium supply chain and pricing dynamics

• Helium supply is volatile due to reliance on byproduct extraction from natural gas and recent disruptions in Algeria and Qatar.

• Cavern storage for helium is limited, with global capacity less than a year’s supply if full; actual inventory levels are uncertain.

• Most helium contracts are long-term, insulating from spot price volatility, though recent conflict has driven up spot prices by 20–40%.

• Inventory at customer sites is limited to a few weeks’ supply, with industrial gas companies owning most containers.

• Gardner, a subsidiary, manufactures specialized cryogenic containers for helium and hydrogen, prioritizing internal needs.

Project updates and strategic outlook

• NEOM green ammonia project in Saudi Arabia is progressing, with power sites nearly complete and commissioning underway; full production targeted for 2027.

• Ammonia output is expected to reach 1.1 million tons annually, with ambitions to sell at a premium over gray ammonia.

• Margin progression is anticipated as market acceptance of green ammonia grows, with fixed costs supporting long-term profitability.

• Future hydrogen supply to Europe depends on evolving EU legislation and market demand, with flexibility to prioritize ammonia or hydrogen sales.

• Strategic partnerships, such as with Yara, are focused on long-term collaboration, with project feasibility decisions expected by midyear.