PX Commercializes DOC Technology - Analyst Blog

Praxair Inc's (PX) Chinese unit, Praxair China, recently announced an agreement to provide the company's Dilute Oxygen Combustion (DOC) technology to Jinchuan Group Limited, an integrated non-ferrous metallurgical and chemical industrial enterprise.

The technology, to be applied at two copper furnaces, will enable Jinchuan Group to save approximately 10 million RMB per year through higher energy efficiency and lower cost for furnace operations.

This technology uses high-momentum fuel and oxygen jets to produce strong in-furnace gas recirculation, ensuring uniform flame, uniform heat release pattern and ultra-low nitrogen oxide emissions.

Praxair China, with the help of this technology and many others, aims at tapping the growing demands for energy efficient and environment friendly technologies by the metallurgy market. The DOC technology was first used at Jinlong Copper in Anhui province, East China in 2009.

Praxair is one of the leading industrial gas producers operating primarily in North America, South America, Europe, and Asia. We believe Praxair has significant growth opportunities in diverse markets and its concerted effort in increasing exposure and tapping opportunities in emerging markets is also very encouraging.

We consider the growth prospects of industrial gas producers as very bright going forward, with ever rising demand for gases due to their wide application areas. Industrial gases are being increasingly used by the chemical processing and petroleum refining, metal production and fabricating, and electronics and health care industries.

As the economy revives from the recent global crisis, requirement for industrial gases is expected to grow. Moreover, the company has an extensive pipeline of projects with backlog expected to be on the rise.

The company is scheduled to release its fourth quarter results on January 26, 2011.

We currently maintain an Outperform recommendation on the stock.