Industrial valve market to top $53 billion in 2012

Sales of industrial valves will exceed $53 billion in 2012, according to the latest updates in the McIlvaine report titled Industrial Valves: World Markets. The oil and gas sector will be the largest purchaser with expenditures of $8.7 billion. The power industry will be the second largest purchaser with purchases exceeding $7.2 billion. The bulk of this expenditure will be for coalfired power plants. Gas turbine and nuclear power plant operators will also be major purchasers. Operators of solar, wind, geothermal and hydropower plants will not be significant purchasers. Special materials are required for the chemical, food, and pharmaceutical industries due to sanitary or corrosion concerns. Mining, iron and steel and wastewater include many applications where abrasion resistance is a requirement. Municipalities will spend $7.6 billion for valves for water and wastewater treatment plants. Much of this investment will be made in Asia where the infrastructure needs are severe. Asia will also be the leading purchaser of valves for power and electronics. The Middle East is a fast growing region relative to valves for refining. It has special needs for combination desalination and power plants. Regions The world market for valves used by industry will grow to $65 billion per year in 2017 against $51 billion in 2011, adding more than $10 billion to current annual sales, according to the latest forecast by the McIlvaine Company. INDUSTRIAL VALVE SEGMENTS ($ MILLION) Industry 2012 Chemical 5,903 Electronics 449 Food 1,106 Iron & Steel 2,223 Metals 852 Mining 1,054 Oil & Gas 8,705 Other Electronics 342 Other Industries 6,031 Pharmaceutical 1,563 Power 7,237 Pulp & Paper 3,207 Refining 6,901 Wastewater 4,189 Water 3,427 Total 53,189 East Asia will account for more than 30 per cent of the market in 2017. The growth in this region will be driven mostly by new infrastructure and heavy industrial spending. More power plants will be built in this region in the next five years than in the rest of the world combined. The investment in municipal wastewater treatment and drinking water facilities in East Asia will also outstrip the other regions. The region will dominate the production of semiconductor chips, flat panels, solar voltaic cells and other devices requiring high performance valves for ultra pure water. The growth in NAFTA will be led by the non-conventional oil and gas sector. Pennsylvania, Texas and other states in the West will expand their production of gas and oil from shale. This will generate very substantial investments in valves. Western Europe will be a slow growth market characteristic by a large percentage of replacement valves for existing plants as opposed to valves for new plants. Eastern Europe will reflect growth in expenditures to meet environmental regulations required for European Union membership. Middle East expenditures will rise as the region increasingly becomes a supplier of refined rather than raw products. Valve sales in this region will also be boosted by the desalination plant investments. The ocean will play a role in several ways. New regulations for ballast water treatment and scrubbing of vessel stack emissions will boost the sales of valves for existing and new vessels. Expanded production of oil and gas from subsea sources will require large and expensive valves. In a previous forecast, the McIlvaine Company notes that many European valve manufacturers are rapidly increasing their sales in Asia. So while European consumption is going to rise slowly, European production and exports will rise at a greater rate. Total sales of European valve manufacturers will rise at an even higher rate to reflect revenues from new manufacturing facilities in Asia. The situation in the Americas mirrors that of Europe only with slightly higher numbers. US valve manufacturers are gaining a strong foothold in the power, pharmaceutical, chemical and other high-tech industries in Asia. China is transitioning from a manufacturer of low technology valves to a range of high and medium technology products. The growth in the Chinese nuclear industry is spurring the development of high technology valves in this sector. The large number of supercritical coal-fired boilers under planning and construction is also a boon to the high-tech valve manufacturers. China is a leader in construction of solar panel and semiconductor facilities. These facilities are purchasing large numbers of small but expensive valves. Asia leads the world in construction of new municipal wastewater and drinking water plants. These plants require a range of valve types and quality. In the US, the growth markets are shale gas and biofuels. The oil sands market in Canada is large and growing. The industry continues to globalise. For example: The Velan, Inc. German sales distribution subsidiary, Velan GmbH, has booked an order of more than $20 million to supply valves to a Russian boiler manufacturer for three 660-MW units of the Barh supercritical coal-fired power plant in India. The customer in India is NTPC Ltd, the largest state-owned power-generating company in India. So a North American company books an order through its German subsidiary for a Russian customer who will in turn install the valves in India. DEMAND BY REGIONS ($ Million) Country 2017 Africa 3,722 CIS 4,725 East Asia 20,160 Eastern Europe 1,469 Middle 5,243 NAFTA 12,642 South & Central America 4,819 West Asia 3,177 Western Europe 9,449 Total 65,406