Forecast: industrial valve 
market for the power industry

The power industry provides one of the largest markets for industrial valves worldwide and demand for these valves continues to grow steadily. The recently released report, ‘Global Industrial Valves Market in Power Industry’ by TechNavio provides an overview of the industrial valve market in the power industry and forecasts significant growth areas, demand drivers, market trends and challenges up to 2018.

Industrial valves in the power industry

According to the new report, industrial valves are used for a variety of applications within the power industry to control, direct, and regulate the flow and pressure of gases, liquids, and fluidised solids. Depending on application, electrically, pneumatically, or hydraulically operated valves may be used.

The main types of industrial valves used in the power industry include globe valves, gate valves, butterfly valves, ball valves, and industrial plug valves.

Together, these five products types accounted for 87 per cent of the global industrial valves market in the power industry in 2013 and are expected to account for a similar level in 2018.

The report found that the global industrial valves market in the power industry is one of the more steadily growing engineering markets. This market is dominated by the Americas, followed by the Asia Pacific (APAC) region and the Europe, Middle East, and Africa (EMEA) region.

In 2013, the Americas accounted for 41 per cent of the market, the APAC region for 31 per cent and the EMEA region for the remaining 28 per cent.

In the period up to 2018, the market in the Americas is expected to grow at a rate of 3.8 per cent. While it will still be the largest market, its growth is expected to be slightly slower than that of the other two regions studied. Over the same period, the APAC market is expected to grow at a rate of 4.6 per cent, and the EMEA market is expected to grow at a rate of 4.2 per cent.

Worldwide, the market for industrial valves in the power industry is expected to grow at a steady rate over the period 2014-2018, posting a rate of 4.2 per cent.

Key drivers to market growth

The global industrial valves market in the power industry has many growth drivers.

The key drivers identified as underlying the forecast growth up to 2018 included:

• Increased demand of industrial valves for gas turbines
• Growing demand of industrial valves from replacement activities
• Increase in investment in renewable energy sources.

These increases in demand will be due to growing industrialisation and rapid infrastructure development across the globe (and especially in developing countries), resulting in higher electricity demand and increases in power generation.

The Americas continue to be the dominant region in power generation, with the US, Canada, and Mexico continuing to play a crucial role. It is estimated that the coal-fired power generation capacity of the US will remain 254GW until 2040 because of stringent government regulations. However, it is estimated that there will be huge growth in power generation through gas turbine and diesel power plants.

In the APAC region, China’s power generation capacity is estimated to increase to 50,000MW per year by 2020. Similarly, India’s power generation capacity has also doubled over the past decade and is expected to increase during the forecast period. Coal-fired power plants are the major source of power generation for these economies.

As valves play an important role in power plants, the continuous generation of power via new and existing power plants will drive the growth of the global industrial valves market in the power industry.

The revenue generated from the sale of valves to coal-fired power plants will be the largest contributor to the market, followed by the revenue generated from the sale of valves to gas turbines and nuclear power plants.

The sale of ball valves will experience the highest growth rate, closely followed by the sale of gate valves.

The major driver for the increased sale of valves is the commissioning of new power plants worldwide. The repair and renovation of existing infrastructure also adds to this revenue.

Stringent environmental policies in the US and Europe, as well as efforts to reduce carbon footprints and carbon dioxide emissions, are the major factors driving huge revenue generation through repair and renovation of existing power plants.

Moreover, power operators are now trending toward new-age valves with high efficiency, low delamination problems, and faster and frequent start-up and shutdown capabilities.

The challenges of a competitive market

Although the global industrial valves market in the power industry is witnessing a steady growth rate, it still faces some serious challenges.

These include:

• Lack of effective product differentiation
• Need to comply with stringent government regulations
• Increased price war among vendors.

The increased presence of local, regional, and international vendors offering similar products at competitive prices is expected to result in increased bargaining power for buyers, which may hinder the growth of the market.

Additionally, cross-industry vendors are now also entering the industrial valve market, which creates intense competition among the industrial valve vendors.
For instance, pump and filtration vendors are also offering valves along with core valve vendors.

Need to comply with stringent government regulations

The need for power generation to comply with stringent government regulations and policies is one of the major growth drivers in the global industrial valves market in the power industry. However, it can also provide a challenge to vendors by encouraging energy efficiency (which may slow the overall increase in power generation) and changing the market shares of different power generation methods.

Increased price war among vendors

The fragmented industrial valve market has forced large industrial valve vendors to increase their market share by implementing low price strategies.

Moreover, additional implementation costs and maintenance costs also have an impact on market vendors’ pricing strategies. Therefore, market vendors will need to change their product pricing strategy to improve their overall revenue generation and R&D investments.

Trends in the industrial valve market

The global industrial valves market in the power industry is witnessing several emerging trends that are expected to continue throughout the forecast period.

Key market trends include:

• An increase in outsourcing of manufacturing activities to the APAC region.
• A steady transition from conventional valves to electrically actuated industrial valves.
• Increased numbers of mergers and acquisitions throughout the industry.

What will customers base buying decisions on? 

In order for companies to survive in an increasingly competitive market, they must adapt their products and services to match what buyers are basing their product choices on.

Key buying criteria throughout the forecast period include:

• Customisation
• Maintenance and support
• Reliability
• Total cost of ownership.

The years ahead

Overall, the period between 2014-2018 will continue to be an exciting yet challenging time for vendors of industrial valves for the power industry. Those who make the most of the forecast market growth will be those who keep a close eye on the market and their customers’ needs and adapt accordingly.

More detailed information on the market, including the overall market value, is available in the full report, ‘Global Industrial Valves Market in Power Industry’, which can be purchased from TechNavio. Visit www.technavio.com for more details.

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