Demand for industrial valves in China is projected to rise 11.5 percent per year through 2011 to 79 billion yuan, according to a study by The Freedonia Group (www.freedoniagroup.com), titled Industrial Valves in China. Gains are expected to be driven by rapid growth in process manufacturing, public utilities construction and general construction activity overall as China continues its process of industrialization and urbanization.
All told, Freedonia says China is a net importer of industrial valve products, with a trade deficit of 950 million yuan and gross imports representing 30 percent of demand in 2006, reflecting high domestic demand and the relatively low standards of valve manufacturing technology in China. Demand for standard valves is expected to continue to account for the larger share of total sales, exceeding 50 billion yuan in 2011, reflecting widespread application in Chinese industrial processes. However, advances are expected to be faster in the automatic valve segment, where annual sales growth of 12.5 percent will be driven by a shift from manual to automated processes in key manufacturing and utilities construction markets.
Steel and steel alloys will remain the dominant valve materials, benefiting from durability, versatility and good performance in high temperature and stress applications. Original equipment demand comprised over three-fifths of the total Chinese valve market in 2006, and will be supported by a positive outlook for gross fixed capital formation.
The process manufacturing industries (particularly chemical production and petroleum refining) and public utilities (especially electric power generation) will continue to be the leading markets for industrial valves. The process manufacturing market is projected to see the fastest gains through 2011, rising 12.6 percent annually to over 34 billion yuan. Gains will be stimulated by substantial growth in chemical, refined petroleum, and pulp and paper output, according to Freedonia.
Meanwhile, the public utilities market is forecast to experience average growth, with valve demand reaching 27.3 billion yuan in 2011. Advances here are expected be driven by the expansion in electric power generation as China continues to industrialize.