Market Insight- Global Valves Market
A valve is a mechanical device that controls or regulates the flow of fluid (liquid or gas) by the action of closing and opening or partially obstructing various gateways. Valves are also used to control temperatures. In civic areas, valves are typically used to control the water supply for household applications. However, valves find applications in industrial use such as oil & gas, chemical, and more to perform crucial tasks. There are various types of valves used namely ball valve, gate valve, butterfly valve, and globe valve. Moreover, valves are used in demineralized water systems, high integrity pressure protection systems, radwaste systems in nuclear facilities, pressure control systems, on/off systems, etc.
The global Valve Market was accounted for US$ 72,862.8 Mn in terms of value in 2019 and is expected to grow at CAGR of 6.8% for the period 2019-2027.
Market Dynamics- Drivers
- Increasing number of oil & gas exploration activities are expected to drive growth of the global valves market during the forecast period
Valves have registered significant demand from the oil & gas industry, typically due to their extensive use throughout upstream, midstream, and downstream activities. Although there is high demand for oil & gas, supply for the same is declining due to worldwide decrease in oil & gas reserves. Thus, such circumstances have compelled oil & gas companies to explore new fields to enhance extraction efficiency. Governments of various countries are focused on investing in new oil & gas companies. For instance, according to Government of Dubai, as of 2017, it owns 1381 oil and gas companies. Demand for valves is anticipated to rise with rising oil & gas plants. Moreover, in February 2017, the U.S. crude oil production surpassed 9 million barrels per day, around 0.5 million barrels higher than in 2016. Floating production storage and offloading (FPSO) necessitates number of valves in activities such as offshore production platforms, tank farms, and gas storage. Hence, these factors are expected to support the market growth during the forecast period.
- High growth in pipelines sector is expected to propel growth of the global valves market over the forecast period
Generally, valves are often placed at a pipeline distance of less than 10% of the total length of the pipeline for effective and easy control of gas in oil and gas and other industries. According to the Indian Oil Corporation Ltd. (IOCL), the natural gas pipeline network in India increased from 10,900 km to 15,000 km with an investment of US$ 1.5 Bn from 2015 to 2016. Moreover, countries such as the U.S> and the U.K. are expected to invest significantly in pipeline sector. For instance, in 2016, the U.S. government launched Dakota Access Pipeline Project, which is expected to carry 470,000 barrels per day of crude for 1,172 miles. Therefore, high growth of pipeline sector is expected to boost growth of the global valves market in the near future.
North America region dominated the global valve Market in 2019, accounting for 30.1% share in terms of volume, followed by Europe, Asia Pacific, Middle East and Africa and Latin America
Source: Coherent Market Insights
Market Dynamics- Restraints
- Increasing cost of raw materials and lack of innovations are expected to hinder the global valves market growth over the forecast period
Raw materials comprise around 60% of the total cost of the product. The amount of R&D required to meet the innovations in the valves market is large. Such issues inhibit the capabilities of valve manufacturers and suppliers to meet the market demand. Furthermore, raw materials such as stainless steel, ductile iron, and carbon steel in the form of the forge are crucial to manufacturing valves. Prices of these materials have been on the rise and fluctuating due to numerous reasons such as increased shipping cost. Moreover, the time and efforts required to innovate specific requirements in valves are higher. Thus, these factors are expected to hinder the market growth over the forecast period.
- Growing competition from unorganized valves manufacturers is expected to hamper the global valves market growth over the forecast period
The global valves market is highly fragmented with high presence of players both large and SMEs. Local unorganized manufacturers are offering stiff competition to large companies by providing valves at a lower price than prevailing price levels. In the market. This, in turn, reduces profit margin and dilutes the market share of the organized valve manufacturers. Moreover, emerging economies in Asia Pacific such as India and China have the presence of unorganized local manufacturers. Thus, these factors are expected to hamper the market growth in the near future.
- High growth of refining and power generation industries can provide major growth opportunities
Sustained expansion of the economy is determined by adequate utilities and infrastructure development. Power sector offers lucrative growth prospects for the global valves market. Various countries around the globe are increasingly investing in power generation. For instance, as of August 2016, the total number of power plants in the U.S. was 7,658 that has the electricity generation capacity of at least 1 megawatt (MW). Moreover, in power generation plants, ball valves, globe valves, control valves, etc. play a crucial role. Opening and closing inlets and outlets and controlling cooling circuits in power plants are major roles of valves in a power plant. There has been a significant increase in number of power stations and power generation capacities across the globe. According to Coherent Market Insights’ analysis, as of 2017, the total installed capacity of power stations in India was 315,426 megawatt (MW). Moreover, The Ministry of Power of India has set a target of 1,229 Bn units of electricity to be generated in the FY 2017-2018.
- Rising demand for valves in water treatment is expected to present major business opportunities
According to the United Nations Organization’s report published in March 2017, 80% of the world’s wastewater is released in the environment untreated. Such alarming consequences regarding untreated wastewater have increased the demand for wastewater treatment plants worldwide. Optimum water treatment systems and valves are employed to make water waste plants technically superior. Different types of valves are used in wastewater treatment plants including check valves, air valves, control valves, gate valves, etc. Check valves are installed in water treatment plants to avoid the flow of water while the pumps are not in operation. Whereas, main air valves are installed on the pump at high points on force to prevent vacuum pockets to prevent from creating force.
Source: Coherent Market Insights
- Growing plant automation
Complex processes in the oil & gas industry and pulp and paper industries are regulated automatically with the use of robots and other advanced technologies. Advent of advanced technology in industries has made activities highly effective and flexible. The primary advantages offered by automation are interoperability, information transparency, and maintaining the integrity of the production activities. Valves have been an integral part of process automation system in industries since they determine the efficiency of the plant. Critical performance areas for valves on automated plants are complex piping systems, fluctuating temperature pipes, and process pressure control.
- Extensive use of valves in a plethora of applications
Industrial valves have witnessed higher demand to achieve greater efficiency in industrial operations. The use of valves has increased significantly across various end-use verticals, owing to reduction of complexities of installation and maintenance of valves. Major companies in the market are focused on offering reliable valves such as butterfly valves, check valves, gate valves, and safety valves that can be utilized for wide range of applications. Moreover, various end-use industries have replaced the long-standing pressure valves with newly introduced safety valves that are capable of performing functions such as relieving, reducing, sequencing, or unloading fluid pressure.
Adoption of valves has elevated with introduction of governmental regulations towards environment and pollution control. Furthermore, some of the regulations and acts introduced by ASEAN countries for waste and wastewater management are
- Government regulation number 82, 2001 for water quality management and wastewater controlling introduced in Indonesia
- Street, drainage and building act 1974 introduced in Malaysia
- Environmental public health act introduced by the government of Singapore that focuses on general waste collection and toxic industrial waste management regulations
- Decision on Hazardous Waste Management 1999 act introduced by the Government of Vietnam
Value Chain Analysis
- The participants in the value chain of valve market are manufacturers are manufacturers, suppliers, manufacturer representatives, stockiest /super stockiest, dealer, retailer and end user. Distribution channels for valves vary from country to country, depending on various factors such as government regulations, buyer behavior, composition of target market, and availability of partners among others.
- With stringent regulations specific to valves, manufacturers in valves market are considering advanced technologies to manufacture various types of valves. The distribution channel followed by companies is extensive. The valve manufacturing companies are focusing on expanding the channel partners to enhance the distribution channel of valves.
In global Valves Market, by product type, Ball Valves sub-segment dominated the global market in 2019, accounting for 15.0% share in terms of volume, followed by Butterfly Valves, globe Valves, Gate Valves, Pressure Reducing Valves and Safety/Relief Valves respectively.
Source: Coherent Market Insights
Key players operating in the global valves market are Schlumberger Limited, Goodwin International Ltd, Honeywell International Inc., General Electric Company, Emerson Electric Co., Rotork Plc, KITZ Corporation, AVK Holding A/S, Bürkert Fluid Control Systems, and Flowserve Corporation.
- Key players in the market are focused on capacity expansion, in order to enhance the market presence. For instance, in February 2020, Schlumberger Limited, a U.S.-based oilfield service company, inaugurated its new manufacturing center for manufacturing of isolation valve technologies such as GROVE valves and ORBIT rising stem ball valves in the King Salman Energy Park (SPARK), Saudi Arabia.
- Major companies in the market are involved in mergers and acquisitions, in order to gain a competitive edge in the market. For instance, in Emerson Electric Co. acquired General Electric’s Intelligent Platform business, enabling Emerson a global leader in automation for processes and industrial customers.