Asia Will Be Leading Cartridge Purchaser By 2019

Sales of liquid cartridges in Asia will reach $6.6 billion by 2019 and account for 36 percent of all cartridges.  This is the conclusion reached by the McIlvaine Company in Cartridge Filters: World Market.  (www.mcilvainecompany.com)

Cartridge Revenues ($ Millions)

A decade ago Asia represented a small portion of the market.  However, its growth has surpassed the other regions for the following reasons.

·       Rising incomes and demand for pure water has greatly increased residential and commercial use of point-of-entry as well as point-of-use filters.

·       The expansion of coal-fired power has generated large investments in boiler feedwater and cooling tower filters.

·       The rise to dominance of semiconductor, photovoltaics and flat panel manufacturing has led to big expenditures in ultrapure water filters.

·       Even though Asia still trails in proprietary drug manufacture, the substantial increase in generics production makes it a significant market.

·       The large numbers of consumers and the demand for purity has caused rapid growth in filters for the food and beverage industry.

·       The chemical industry in Asia has grown and will continue to grow at a faster pace than ROW.

·       Refinery construction in Asia has and will continue to be growing faster than other areas.

·       Pulp and paper production in Asia will continue to outstrip ROW.

·       Development of Asian manufacturing facilities by international suppliers has reduced Asian imports and increased exports.

·       The coal-to-liquids and coal-to-gas investments promise to ensure growth of cartridge sales in the next five years.

For more information on Cartridge Filters: World Market, click on:   http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/117-n024.

Industrial Valve Revenues Will Rise To Between $65 - $75 Billion By 2020

In 2014, Industrial valve sales were less than $57 billion.  By 2020, revenues will rise to between $65 - $75 billion, according to the latest forecast from the McIlvaine Company in Industrial Valves: World Market.  (www.mcilvainecompany.com)

Inability to precisely predict revenues is due not only to the obvious factors such as general economic and population growth, but to variables in the process options. Valve investments vary from option to option.   Using power generation as an example - if coal is considered as the basis for valve purchases, nuclear purchases of valves will be higher and gas turbines lower.

Efforts by environmentalists to reduce reliance on coal are falling on deaf ears in Asia. The cost and safety concerns about nuclear power are under scrutiny. Gas turbine revenues are going to rise at a faster rate than other options but from a relatively small base.  It would take large double-digit gains to offset the valve purchases for other options.

The biggest variable presently affecting valve revenues is the choice of oil and gas extraction method.  There are large differences in valve revenues depending on the choice.

The price of oil has been cut in half from highs in 2014 of over $100/barrel.  An increase in conventional production at the expense of subsea and other unconventional options would result in smaller valve revenues.

Valve sales for oil and gas will be negatively impacted by the lower prices. The question is: What is the magnitude and duration?  Oil prices have always cycled.  When prices fall, the highest cost producers cease activity. Ultimately, this creates shortages and prices rise.

Producers who will drop out in the short-term are operating on the following realities:

Exploration has been estimated to be around $30/bbl for a new source.  So at $50/barrel, the exploration is going to drop substantially.  However, exploration accounts for a relatively small percentage of the total valve revenues.  Development includes drilling new wells in areas which have already been explored.  So at $50/barrel, there will be justification for this investment.  The cost of operating existing wells is small. Thus this production is unaffected.

The decline rate is the key factor in the rebound of prices and valve revenues.  Averages of 10-15%/yr. have been cited for the industry.  If no new wells were drilled, the flow would drop by 20 or 30% within just two years.  The decline rate for shale sources in the U.S. is being debated. The ability of conventional suppliers in the Middle East to raise production from existing wells is also in question.

It is likely that demand will continue to rise.  The lower oil prices and booming economies in Asia and the U.S. will contribute to that rise. So imbalances in supply/demand and potential shortages will lead to the next round of oil price increases and investment in unconventional sources.

Valve revenues will also be impacted by technology developments.  The cost of direct coal-to-liquids could be as low as $40/barrel.  If so, China would dominate the world energy picture. There are continuing developments in the extraction of oil and gas from shale.  The cost of unconventional extraction rises as old wells need enhanced recovery, artificial lifts and other investments. As the cost of unconventional extraction is reduced, the margin between the two is narrowed. The result is less ability to manipulate prices by conventional producers.

Valve performance improvements are another factor which would positively impact valve revenues. There are lots of problems with subsea valves. Operators will be willing to pay more for valves which are more reliable under the most extreme conditions.

Other industries purchasing valves will be positively impacted by lower oil prices. So in the longer term, a decline in oil and gas valve revenues will be offset by gains in the chemical, steel, mining and other industries.  The picture changes continually. McIlvaine revises its long-term forecasts at least once every quarter and more often if events so dictate.

For more information on Industrial Valves: World Market, click on:  http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/115-n028

Headlines for Utility E-Alert – January 9, 2015

UTILITY E-ALERT

#1205 – January 9, 2015

Table of Contents

COAL – US

·       NV Energy retires Three 100 MW Coal-fired Units at Reid Gardner

·       Public Service Company of New Hampshire seeks reimbursement for Merrimack Station Scrubber

·       Indiana Michigan Power nears Permit for Rockport Unit 1 SCR Project

·       New Mexico Regulators prepare to consider Future of Coal-fired Power Plant

·       Duke announces complete Ash excavation at W.S. Lee in South Carolina

COAL – WORLD

• Torishima receives Orders for Cooling Water Pumps for ZETES III in Turkey
• Vietnam approves $800 Million Contract with Sumitomo on Power Plant Expansion

GAS/OIL – US

·       Decision on Oxford, Connecticut Natural Gas-fired Power Plant required by May

·       Construction begins on 799 MW Gas-fired Power Plant in Ohio

·       Initial Approval for New 915 MW Combined Cycle Rockwood Energy Center

·       Entergy announces completion of New Combined Cycle Power Plant in Louisiana 

·       New Site proposed for $800 Million Lordstown Gas-fired Power Plant

·       Ute Indian Tribe plans to build 1,000 MW Natural Gas-fired Power Plant in NE Utah

·       PGE announced Port Westward Unit 2, Gas-fired Power Plant Now in Service in Oregon

GAS/OIL – WORLD

·       ElSewedy Electric (Egypt) inks Two Power Plants Contract

·       Mirfa Power and Water Plant to begin construction in February

·       ACS (Spain) gets $323 Million Contract to upgrade Tula Combined Cycle Power Plant

·       Sixty-five Percent of First Phase of Az-Zour Power Plant in Kuwait achieved 

NUCLEAR

·       Bechtel and Westinghouse establish Alliance to pursue Nuclear Decommissioning Work

·       Ukraine's import of US Nuclear Fuel risky says Russia

• Vermont Yankee ends Operations after 42 Years

·       Cape awarded Five Year Contract Extension with EDF Energy

BUSINESS

·       American Energy merging Subsidiaries

·       Boom in Industrial Purchases of Pollution Control Equipment in the US

·       Coal-fired Power Plants around the World are switching to Fabric Filters

·       GE to provide $1.2 Billion New Power Plant in Tabuk

·       Snowy Hydro buys Colongra Gas-fired Peaking Plant from Delta Electricity for $234 Million

·       TVA Board approves additional Pollution Controls for Shawnee Fossil-fuelled Power Plant

HOT TOPIC HOUR

• Media Selection for Coal-fired Boilers was the Hot Topic January 8, 2015
• Upcoming Hot Topic Hours

For more information on the Utility Tracking System, click on:  http://home.mcilvainecompany.com/index.php/databases/2-uncategorised/89-42ei

Hot Topic Hour Registration

On Thursdays at 10:00 a.m. Central time, McIlvaine hosts a 90 minute web meeting on important energy and pollution control subjects.  These Webinars are free of charge to owner/operators of the plants. They are also free to McIlvaine Subscribers of Power Plant Air Quality Decisions and Utility Tracking System.  The cost for others is $300.00 per webinar.

See below for information on upcoming Hot Topic Hours.  We welcome your input relative to suggested additions.

Click here for the Subscriber and Power Plant or Cement Plant Owner/Operator Registration Form

Click here for the Non-Subscribers Registration Form           

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Bob McIlvaine
President
847-784-0012 ext 112
rmcilvaine@mcilvainecompany.com
www.mcilvainecompany.com