Carbon Dioxide Market Update 2025-2026: Price Trends, Supply-Demand Dynamics and Industry Outlook

A Market Navigating Seasonal Cycles and Structural Growth

Introduction

Carbon dioxide (CO₂) is far more than just a byproduct of combustion or a greenhouse gas — it is an essential industrial commodity with a vast range of applications across food and beverage, metal fabrication, chemical synthesis, enhanced oil recovery, electronics manufacturing, and healthcare. From carbonating beverages and preserving fresh food to shielding welding arcs and cleaning semiconductor wafers, CO₂ quietly underpins countless industrial processes. Over the past year, the global carbon dioxide market has experienced a complex interplay of forces: seasonal demand fluctuations, regional supply tightness, rising production capacity, and steady long-term growth driven by industrial expansion. This article examines the latest price trends, supply-demand dynamics, and market developments in the CO₂ market from 2025 through mid‑2026, and explores what lies ahead for this versatile industrial gas.

Global Market Size: Steady Growth Across Multiple Forecasts

The global carbon dioxide market demonstrated robust growth in 2025 across various valuation benchmarks. According to Fortune Business Insights, the global CO₂ market was valued at USD 11.90 billion in 2025, projected to grow to USD 12.20 billion in 2026 and reach USD 16.30 billion by 2034, representing a compound annual growth rate (CAGR) of 3.60%. Similarly, Research and Markets estimated the market size at USD 10.52 billion in 2025, growing to USD 11.43 billion in 2026 at a CAGR of 8.6%. Another study by 360iResearch valued the market at USD 4.70 billion in 2025, projecting it to reach USD 9.64 billion by 2032 at a much higher CAGR of 10.78%.

Regionally, Asia Pacific dominates the global CO₂ market, accounting for approximately 46.10% of market share in 2025. The United States market was estimated at USD 4.4 billion in 2025, while China — the world’s second largest economy — is forecast to reach a projected market size of USD 4.4 billion by 2032, trailing a CAGR of 7.3%.

China Market: Price Trends Across 2025-2026

The Chinese CO₂ market — the world‘s largest by volume — experienced significant price fluctuations throughout 2025 and into 2026, driven primarily by seasonal demand patterns and regional supply conditions.

2025 Market Performance. The first half of 2025 saw the national average price oscillate within a relatively narrow range of 310‑340 RMB/ton, with the overall H1 average settling at 326 RMB/ton. The market showed modest strength from May through July, with prices trending upward amid improved trading activity. However, the second half of the year witnessed a marked cooling. In Q4 2025, the national average price dropped to 321 RMB/ton, representing a 5.59% decline from Q3 and a 3.31% decrease year‑on‑year. By December, prices had fallen to approximately 320 RMB/ton as seasonal weakness set in.

Early 2026: A Weak Start. The year opened on a soft note. Following the New Year holiday, domestic CO₂ prices continued to probe new lows, with the national average reaching 310 RMB/ton by January 9 — a decline of approximately 2% from early December. The market remained in a low‑level consolidation phase throughout January, constrained by a dual weakness in both supply and demand. January‘s national average price settled at 311 RMB/ton, down 1.0% month‑on‑month.

The Chinese New Year holiday in February brought further pressure. The national average dipped to 310 RMB/ton, a modest 0.30% month‑on‑month decline. Industry profits also compressed slightly, with gross margins falling to 170 RMB/ton from 171 RMB/ton in January, while production costs remained flat at 140 RMB/ton.

Mid‑2026: Seasonal Recovery and Price Firming. As winter gave way to spring and summer, the CO₂ market began its seasonal recovery. By March, market sentiment had turned cautiously optimistic, with 55% of industry participants expecting price increases. The recovery gained momentum through April and May. By late May 2026, the national average price had risen to approximately 322 RMB/ton, a modest 0.63% week‑on‑week increase. Entering June, the market continued its upward trajectory. As of June 10, the national average stood at 312.61 RMB/ton. By mid‑June, the national average had climbed further to 329 RMB/ton — a 2.17% week‑on‑week gain. Industry analysts project further upside, with next‑week averages expected to reach 325‑331 RMB/ton as the traditional peak season unfolds.

Regional Price Disparities

China‘s CO₂ market exhibits significant regional price variations, reflecting differences in local supply‑demand balances, production costs, and transportation logistics. In June 2026, Shandong industrial‑grade CO₂ mainstream ex‑factory prices ranged from 200‑280 RMB/ton, while food‑grade CO₂ commanded 380‑400 RMB/ton. In Jiangsu, mainstream ex‑factory prices were slightly higher at 280‑330 RMB/ton. By contrast, Hebei prices ranged from 240‑310 RMB/ton, while Central China prices were notably lower at approximately 160 RMB/ton. The Northeast region commanded the highest prices at 436 RMB/ton, reflecting higher transportation and production costs.

Supply‑Demand Dynamics: A Market in Transition

Supply Side. China‘s CO₂ production capacity has expanded dramatically in recent years. By 2025, national annual capacity was estimated at 36.21 million tons, representing a compound annual growth rate of approximately 19%. Capacity utilization, however, remains highly seasonal. In Q1 2025, weekly capacity utilization ranged from 39% to 47%, averaging approximately 45%. This pattern largely repeated in early 2026, with average operating rates remaining near 45% during the winter months.

Looking ahead to 2026, the supply side is expected to maintain the relatively loose pattern seen in 2025, with total market supply remaining ample. However, intensive plant maintenance schedules during the summer months can create temporary regional tightness. As of mid‑June, intensive maintenance had reduced inventories at many facilities, contributing to upward price pressure.

Demand Side. Demand for CO₂ presents a picture of “steady traditional growth, emerging sector explosion”. Traditional applications — including welding shielding gas, metal fabrication, food and beverage carbonation, and dry ice production — continue to provide stable baseline demand. Meanwhile, emerging applications are creating new growth vectors:

- New energy vehicle battery cleaning: As EV production scales up, battery cleaning processes require high‑purity CO₂, driving incremental demand.

- Semiconductor manufacturing: High‑purity electronic‑grade CO₂ is increasingly used in wafer cleaning and other critical processes.

- Enhanced oil recovery (EOR): CO₂ injection for oil field stimulation continues to grow steadily, providing firm demand support.

Seasonal factors play a critical role in demand fluctuations. Summer heat drives dry ice consumption for cold chain logistics and food preservation, while winter cold reduces demand. The 2026 summer season has seen dry ice demand recover significantly, supported by rising temperatures.

Global Price Trends

Beyond China, international CO₂ prices have also shown notable movement. European merchant CO₂ prices rose 24% from USD 0.25/kg in Q1 2025 to USD 0.31/kg in Q4 2025, before easing 7.59% to USD 0.29/kg in Q1 2026. The United States market exhibited wider price volatility, with sampled transaction prices ranging from USD 4.46/kg to over USD 118/kg depending on grade, purity, and transaction timing. China‘s export prices remained competitive, with benchmark transaction prices around USD 4.37/kg as of late 2025.

Market Outlook: Seasonal Strength and Structural Growth

Looking ahead, the CO₂ market presents a cautiously optimistic outlook:

Short‑term (Summer 2026). Rising temperatures will continue to support dry ice demand, while intensive plant maintenance keeps supply relatively contained. Industry analysts expect prices to continue their gradual upward trend, with the national average potentially reaching 325‑331 RMB/ton in the coming weeks. The market has entered its traditional peak season, with improving transaction activity and limited downside risk.

Medium to Long‑term. The global CO₂ market is projected to grow steadily from USD 11.90 billion in 2025 to USD 16.30 billion by 2034. Key growth drivers include:

- Expanding food and beverage processing industries

- Rising demand for dry ice in cold chain logistics

- Growth in semiconductor and electronics manufacturing

- Increasing adoption of CO₂ in enhanced oil recovery

- Healthcare and pharmaceutical applications

The Asia‑Pacific region will remain the dominant market, supported by rapid industrialization and infrastructure development across the region.