A number of key trends, including rising demand, aging infrastructure, automation and servicing requirements shape demand for valves across end-users globally. Growing production of shale gas and oil sands in North America and increasing exploration activity in other regions such as Asia and Africa makes the oil & gas end user segment to be one of the biggest influencers of the valve market. The offshore oil and gas industry in Latin America also sees investments in floating, offshore production platforms, and production and storage platforms (FPSOs).
As gas transport takes a huge chunk of the midstream infrastructure, the replacement of old valves with more efficient ones will boost valve sales. As the United States heads towards becoming energy independent, investments of about $8 billion per year have already been set in place for the next 10 years. The majority of this is marked for transportation infrastructure and export terminals. With development of offshore sites and demand from Russia, the midstream segment of oil and gas is poised to become a large market in Europe.
While pipeline installations are increasing, the number of booster stations along the pipeline is increasing as well. These stations will be monitored and controlled from a centralized location. Along with growth in unconventional oil and gas, the downstream segment is also expected to have significant investments which will add to valve market growth. In addition, upgrades and capacity expansion investments will contribute to valve demand significantly, particularly in the Middle East, Africa and Russia.
The water and wastewater industry is another major supporter of increasing population and urbanization across regions. Bright spots include rising investments in emerging regions Asia and Africa, and high-potential retrofit markets in North America. The Asia Pacific region will exhibit the highest growth, as rapid industrialization and need for potable water will likely result in strong opportunities. Africa shows great possibilities as it houses water-intensive industries like mining, population growth and an expanding water infrastructure. Desalination plants will likely play a key role as we approach water scarcity; investments are seen in key regions Asia Pacific and Middle East.
In the chemicals industry, ethylene and polypropylene plants will be established as a result of the North American shale boom. Asia Pacific also has a large chemical processing industry, particularly India and China. The power generation industry also creates demand for valves in China as it is estimated that approximately 30 nuclear power plants will be established. In Europe, renewable sources of energy are the trend for electricity generation. Valves find niche applications in this industry as compared to traditional coal/gas-fired power plants.
Global Outlook of the Valve Market
Critical components to multiple processes across industries, valves will see growth of about 5.0% globally. Demand will be primarily fuelled by investments in emerging economies such as Asia Pacific, Africa and Latin America. The oil and gas, power generation and water and wastewater industries are key end-user segments in these regions. Each of these industries has key trends are expected to increase valve demand and drive the market.
Control valves are expected to see the highest CAGR of about 6.6% between 2014 and 2018. These valves find extensive use in downstream applications of the oil and gas industry as automation and controlling needs increase in refineries. Deep water exploration activities are another notable application requiring control valves. Modernization and upgrading of refineries in Russia and Africa will likely increase the adoption rate of control valves. Among the various categories of control valves, sliding stem control valves are used predominantly in the oil and gas industry; the rotating shaft control valves are used predominantly in the power generation, water and wastewater, and chemical processing industries.
Quarter-turn valves are dominated by butterfly and ball valves. Ball valves can be found in the oil and gas industry for FPSO, offshore production platforms, pipelines, tank farms, gas storage applications, emergency shutdown and specialized LNG applications. Another valve gaining popularity due to increase in offshore applications is the triple offset butterfly valve. Benefits of size and weight make them apt for offshore platform installations.
Lastly, the multi-turn valve, dominated by gate valves, is expected to see the lowest growth. Increasing adoption of control valves and a projected increase in demand for triple offset quarter-turn valves will likely have a negative impact on growth of multi-turn valves. On the other hand, gate valves are best suited to handle slurries and viscous media hence the mining and water and wastewater industry will provide moderate demand. Additionally, gate valves have a tighter shut off when compared to ball valves making them better for certain subsea applications.
The outlook of the global valve market is bright overall, with opportunities in oil and gas and related industries. As end-users enhance process automation to better manage operation costs and increase equipment intelligence, increased demand for valves across industries is expected. Intelligent systems allow real-time access to diagnostic information enabling maintenance activities to move from reactive to more proactive. Reducing the numbers and length of unscheduled shutdowns brings tangible benefit to manufacturing facilities’ bottom-line. Hence, valve manufacturers must focus on R&D to provide complete valve automation solutions to customers.