Valve Forecast Changes Webinar - September 11, 2015
This 40 minute webinar will review changes to the forecasts in Industrial
Valves: World Market. Explanations will be given for key factor selections such
as oil prices and Chinese economic growth. Examples of the type of information
to be presented are shown below.
The market for industrial valves is impacted by many different factors. Some of
these factors are constantly changing. Two of the biggest changes in the last
month have been the economic slowdown in China and the lower prices for oil and
gas.
Valve sales in 2015 will be $57 billion of which China will account for 17
percent. If Chinese economic growth continues at 7 percent over the next four
years, there will be an expansion of the valve market by $12 billion. Under a
zero annual economic growth in China the world valve market would only grow $5
billion/yr. by 2019. This takes into account not only the lower purchases in
China but reduced purchases by suppliers to China.
It now looks as if the economic growth for China in 2016 will be less than the
anticipated 7 percent. Predictions range to as low as 2 percent. This could be
followed by a return to 7 percent growth in succeeding years including 2019.
However, the political and financial management of the economy is facing a
confidence crisis which it must weather if it is to resume its previous growth
levels. There are also questions about the reliability of some of the government
statistics which are used to assess growth. It is, therefore, necessary to look
beyond the easily available statistics and to continue to analyze the
fundamentals. Even though the stock market has dropped dramatically in the third
quarter of 2015, it still remains at high levels compared to previous years.
Consumer demand is high and with reductions in interest rates industrial
expansion will be encouraged.
The drop in oil prices to under $40 /barrel late in the third quarter 2015 has
immediate impacts on the valve market. Drilling activity has been reduced. A
number of large projects have been delayed or canceled. However, the overall
impact on the valve market is softened by the fact that the majority of valve
are sold for applications unaffected by oil prices.
The market for industrial valves will grow by 16 percent from 2015 to 2019 at
oil prices of $80/barrel during the period. At $40/barrel, the growth will only
be 9 percent.
The industrial valve market is led by oil and gas which represents 15 percent of
the present market. However water and wastewater, power, refining, petrochemical
and other industries account for 85 percent of the market. The impact of future
oil prices on the market can be best predicted by estimating the impact on the
individual segments.
Oil and gas can be divided into two segments. The aftermarket and routine
purchases for small projects represent two-thirds of the total or 10 percent of
the present total pump market. The longer term large project revenues represent
only 5 percent of the current market. If the price of oil were to continue to
remain at $40/bbl through 2019, revenues in this segment would shrink over the
period.
The chart shows percentages of the present 2015 market for the year 2019. At
$40/barrel oil the long range valve product revenue from the oil and gas large
project segment would shrink by 60 percent from 5 percent of the current market
in 2015 to an amount in 2019 which is equivalent to 2 percent of the 2015
market. On the other hand, the oil and gas aftermarket and market for small
projects would grow slightly during the four year period. In fact, the market
for pipeline valves will be positively impacted as low cost oil and gas needs to
be moved to more places.
The petrochemical market will grow faster at $40 oil. Municipal water and
wastewater will be unaffected by the fluctuation in oil prices. Lower prices
will result in more gasoline being consumed and more oil being refined. The
power market will be impacted by greater use of gas turbine combined cycle power
plants but total revenues for valves in the power industry will not be impacted
greatly by fluctuating oil prices.
McIlvaine will continue to assess the likely changes in oil prices based on the
following factors:
• The breakeven cost for a new well
o Hydraulic fracturing breakeven point is $30 to $50/barrel equivalent based on
improved management practices and the extraction of more products from existing
wells.
o Oil and tar sands projects break even at $65/barrel.
o Subsea is more expensive.
• New technology developments
o Bechtel experience with coal seam gas to LNG in Australia indicates lower
break even costs than subsea extraction.
o China coal to syngas and chemicals could be an alternative which is more than
competitive at $40 oil. McIlvaine has recommended marrying the two stage (HCl/SO2)
scrubbing along with conventional hydrochloric acid leaching to extract rare
earths and generate by product revenue.
• Demand
o The slowdown in China could impact demand as could economic problems in Greece
and other countries.
o Demand is a function of industrial activity. There is little equipment needed
to extract Saudi oil. On the other hand, over 2,000 companies rely on the
Alberta oil sands market for their revenues. The greater the industrial activity
the greater the oil demand.
• Supply
o Saudi Arabia could choose to restrict production. In many ways the situation
is analogous to the gold in Ft. Knox. You could sell it at any price and
generate positive cash flow. However, it is a precious and finite resource which
is important to future generations.
o Market driven companies will typically be reactive rather than proactive and
will only increase drilling after oil prices rise to a level to make drilling
profitable.
• Political developments
o Lifting the Iran embargo on oil exports.
o Russian activities in the Ukraine and elsewhere.
o Chinese efforts to manage the economy.
o Uncertainties in North Korea, Greece and Venezuela.
• Regulatory initiatives
o Export restrictions.
o Climate change regulations.
o Pollution control requirements for hydraulic fracturing.
• Traumatic events
o Major oil spills.
o Large meteorite impact, earthquake or major volcano eruption
Some of these developments are more predictable than others. The low oil prices
lead to lower extraction activity which eventually leads to shortages and higher
prices. On the other hand, wars, oil spills and earthquakes cannot be easily
predicted. As a result, there will be the need for continuous changes in the
forecasts to take into account the surprises.
Click Here to Register
Record Your Power Point Presentations and Reach the Prospects
The presentations which will convince a prospect to consider a specific product
or service are too often only shown to a few customers. We can record these
presentations for less than $1000 each and post them to YouTube. With coverage
directly on YouTube plus links from the McIlvaine website and your website, you
can gain as many as 1000 viewers. What other medium can give you the attention
of an interested prospect for $1. In addition to English, your salesmen in China
or other countries can provide a duplicate presentation in the local language.
For more information on this program contact Bob McIlvaine at:
rmcilvaine@mcilvainecompany.com 847 784 0012 ext. 112.
World Market for Air and Water Monitoring to Rise to be $31 - $33 Billion in
2019 Depending on the Chinese Growth Rate
China will spend more than $1.7 billion for power plant air and water monitoring
in 2015. This represents 40 percent of the world’s power plant air and water
monitoring purchases. The total monitoring market for all industries will be $29
billion of which China represents 17 percent. China will be the leading
continuous emissions monitoring purchaser in 2015 with forecasted purchases of
$750 million. Residential/commercial HVAC air monitoring purchases in China will
be $1.9 billion in 2015.
The uncertainty relative to future growth in the Chinese economy makes the
prediction of the 2019 world market more difficult. At an economic growth rate
of 7 percent in China, the world market in 2019 will be $33 billion.
At 7 percent annual economic growth through 2019 continuous emission monitoring
and residential HVAC expenditures will be at about the same level as in 2015.
The reason is that 2015 revenues are at a high point and cannot be expected to
keep increasing. At a 2 percent economic growth rate in China, there would be a
substantial reduction in air and water monitoring purchases in that country. The
result would be a world market in 2019 of only $31 billion.
McIlvaine is revising air and water monitoring forecasts quarterly in N031 Air
and Water Monitoring: World Market. This example focused just on the Chinese
economy could be misleading due to the fact that many variables have to be taken
into account in each quarterly change. China is a leading purchaser but other
trends could be more significant.
One of the significant variables is the price of oil. The oil and gas industry
is a mid-range purchaser of air and water monitoring. These prices also
indirectly impact other market segments. The political situation in Southern
Europe, Russia and other countries is important and constantly changing.
For more information on N031 Air and Water Monitoring: World Market, click on:
http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/106-n031.
Chinese Air Pollution Tsunami Will Hit U.S. Shores in a Few Years
A huge but declining air pollution control (APC) market in China will create a
tsunami which will exceed the Japanese and European APC tsunamis of previous
decades. This is the prediction of McIlvaine Company in Air Pollution
Management. (www.mcilvainecompany.com)
What is an APC tsunami and what is its cause? The tsunami is the sudden
appearance of many new foreign players in a domestic market. The cause is that
national regulations create temporary large markets. When these markets slow,
the suppliers look elsewhere to sell their products.
The U.S. has experienced two such events. Flue gas desulfurization (FGD) was
developed in the U.S. and applied to 10 percent of the 300,000 MW coal-fired
base in the 1975 timeframe. Japan then decided to install FGD immediately on all
its 30,000 MW of coal-fired capacity. So it was the world’s largest market for
several years. Mitsubishi, Chiyoda and Hitachi all entered the market. When the
Japanese market subsided, they started pursuing the U.S. market and over the
years became major suppliers.
The world precipitator market was dominated by two U.S. companies: Research
Cottrell (RC) and Western Precipitation (WP). As a result of European tsunami,
they disappeared under the waves. Their demise was more than just the aggressive
activity of European suppliers. Europe mandated continuous compliance for
particulate control. No such requirements existed in the U.S. Flimsy wire
rappers supplied by RC and WP would break and were no match for the rigid frame
European design. Flӓkt (Sweden) very quickly became the top U.S. precipitator
supplier.
The Japanese market for coal-fired boiler air pollution control is one tenth the
size of the U.S. market. The European market is equal to the U.S. The Chinese
market is four times the U.S. in the long term and twenty times the U.S. in the
short term. So the Chinese tsunami potential is huge. The top ten air pollution
control companies in China are all in the top twenty worldwide even though all
their business is in China. The huge retrofit program has created an
unsustainable bulge in the market. The economy is also slowing and there will be
no more years with 100,000 MW of new coal-fired power plants.
Much of the Chinese technology was originally under license, but improvements to
the technology have been made. One major supplier requires its engineering staff
to spend 30 percent of its time on development of improved products. One example
of an improved product is a hybrid precipitator-fabric filter licensed from U.S.
DOE. The Chinese supplier has commercialized this with many successful
installations. The U.S. Dry Fork power plant dry scrubbing system duplicates an
installation in China.
The magnitude of the tsunami can be measured in SCR catalyst capacity. World
demand in 2010 was 130,000 m3. Chinese SCR catalyst production was zero. Due to
retrofits there was a Chinese need for as much as 200,000 m3 in just one year.
China now is the world production leader. However, catalyst only needs to be
replaced every six years, so China already has excess capacity. The situation
relative to systems and components is even more calamitous. Systems last 25
years.
Coal-fired boilers are the largest application for air pollution control. Future
new equipment markets are spread throughout the developing countries. However,
there is a very large upgrade and maintenance market in the U.S. and Europe. The
Chinese tsunami will necessarily be focused on the existing U.S. plants.
The worldwide APC new system capability already exceeds the needs over the next
decade. On the other hand, the upgrade and maintenance demand is going to exceed
supplier capability. Plant owners want to focus on their core business and would
like to outsource as much of the air pollution control activities as possible.
The result will be a Chinese Total Solutions tsunami which provides all
upgrading, operations and maintenance needs.
For more information, click on:
5AB Air Pollution Management
N031 Air and Water Monitoring: World Market
N027 FGD Market and Strategies
N018 Electrostatic Precipitator World Market
N021 World Fabric Filter and Element Market
Headlines for Utility E-Alert – August 28, 2015
UTILITY E-ALERT
#1238– August 28, 2015
Table of Contents
COAL – US
Lease extension approved at Four Corners Power Plant to 2041
Finger Lakes Coal-fired Power Plant Subsidy Request Opposed
Judge dismisses Most Claims of the US EPA in Clean Air Act Case against
Luminant Generation
GAS/OIL – US
Gemma Power Systems enters into Two EPC Agreements with NTE Energy
Xcel Energy reduces Greenhouse Gas Emissions by more than 20 Percent in Past
Decade
PSEG Power 540-MW Combined Cycle Power Plant clears PJM's Reliability Pricing
Model Base Residual Auction
GAS/OIL – WORLD
Angolans Provinces to Benefit from Soyo Gas-fired Power Station
GASIFICATION
AECOM to provide Construction Services for Dakota Gasification Plant
PHG Energy to build Biomass Gasification Plant in Tennessee
NUCLEAR
Russia, Egypt cooperate on Free Trade Zone, Nuclear Plant and Industrial City
Three Exelon Nuclear Power Plants do not clear PJM Auction
BUSINESS
LongKing is a Market Leader in Air Pollution Control with nearly $1 Billion in
Annual Sales
Materials Solutions announces strategic investment from Siemens Venture
Capital
Louisiana Regulators approve merger of Entergy Utilities
Southern Company to acquire AGL Resources
MET expands Solutions Portfolio to South Asia Market
New Report from the IEA Clean Coal Centre
CU-Boulder receives $3 Million grant to develop Power Plant Cooling Technology
Louisiana Regulators approve merger of Entergy Utilities
Oil Prices to Have Minor Impact on the Market for Scrubbers and Absorbers
Oil Price and China Stock Market Plunges will Impact the Air Filtration and
Purification Market
HOT TOPIC HOUR
McIlvaine Hot Topic Hours and Recordings
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
”Power Plant Pumps” is the Hot Topic Hour on September 10, 2015 at 10:00 a.m.
CST
A webinar on September 10 at 10:00 a.m. central time will cover the options and
issues regarding selection of fossil-fired power plant pumps. There is a very
ambitious goal to provide a website with the most comprehensive information on
power plant pumps. This is part of a whole knowledge system to provide Alerts,
Answers, Analysis and Advancement in every aspect of power. Owners and operators
around the world have free access to 44I Power Plant Air Quality Decisions
(Power Plant Decisions Orchard) and 59D Gas Turbine and Combined Cycle
Decisions. The Power Plant Pumps Decision Guide is one of the subsidiary
websites in both these knowledge systems.
This webinar will be focused on creating a Power Plant Pump Route Map and
Summary which will help decision makers navigate the website. The first inputs
to this Route map are displayed at Power Plant Pumps Route Map.
The following presenters will be helping to lead the discussions:
Jose Gutierrez, Director/Business Development, ITT Corporation & Xylem/ Goulds
Vertical Products
Kei Koeda, Manager, International Sales & Marketing, Hydraulic & Energy Business
Group, Business Division, Energy & Environment, Mitsubishi Heavy Industries,
Ltd.
Jason M. Hoover, Leader – Medium Voltage Drives, USA, Siemens Large Drives
Allen Daniszewski, National Sales Manager – Industrial Products, SPX Process
Equipment –Delavan Operations
The website already exists but there is conflicting information. For example,
the introduction of ceramic impellers for FGD slurries needs to be more closely
examined. These more detailed subjects will be pursued with continuing
correspondence and future webinars.
If you want to participate in the discussion and are an owner/operator or
subscriber to 44I Power Plant Air Quality Decisions, 59D Gas Turbine and
Combined Cycle Decisions, or N019 Pumps World Market there is no cost for
participating in the actual discussion. Otherwise there is a $300 participation
fee. For more information on supplying data or participating contact Bob
McIlvaine at rmcilvaine@mcilvainecompany.com
Click here to register
McIlvaine Hot Topic Hours and Recordings
McIlvaine webinars offer the opportunity to view the latest presentations and
join discussions while sitting at your desk. Hot Topic Hours cater to the end
users as well as suppliers while the Market Updates cater to the suppliers and
investors. Since McIlvaine records and provides streaming media access to these
webinars there is a treasure trove of value only a click away. McIlvaine
webinars are free to certain McIlvaine service subscribers. There is a charge
for others. Hot Topic Hours are free to owner/operators. Sponsored webinars
provide insights to particular products and services. They are free. Recordings
can be immediately viewed from the list provided below.
DATE UPCOMING HOT TOPIC HOUR UPCOMING MARKET UPDATES
September 10, 2015 Power Plant Pumps
A decision guide for pump selection for intake,
cooling, ultrapure water, steam and wastewater from coal
and gas turbine power plants. More information
Click here to register
September 11, 2015 Valve Market Forecast Changes
The oil prices and Chinese economy will be two of the drivers evaluated as the
basis for adjustments in the
2016-21 forecasts for industrial valves. More information
Click here to register
September 24, 2015 Power Plant Water Monitoring
A decision guide for selection of monitoring equipment for
intake water, cooling, ultrapure water steam and wastewater
from coal and gas turbine power plants. More information
Click here to register
September 25, 2015 Pump Market Forecast Changes
The oil prices and Chinese economy will be two of the drivers evaluated as the
basis for adjustments in the
2016-21 forecasts for pumps. More information
Click here to register
October 1, 2015 Power Plant Water Treatment Chemicals
A decision guide for selection of chemicals to treat intake
water, cooling, ultrapure water steam and wastewater form
coal and gas turbine power plants.
Click here to register
October 2, 2015 Fabric Filter Market Forecast Changes
New technology such as ceramic catalytic filter elements, the Chinese economic
slowdown, oil prices and other factors will be explained in terms of their
impact on the 2015-21 market for fabric filters, bags, media and fibers.
Click here to register
October 22, 2015 Precipitator Improvements
Decision guide to dry, hybrid and wet electrostatic
precipitators for solid fuel combustion, refining and other
industries. Focus will be on improvements to the electricals
and components.
Click here to register
November 12, 2015 Dry Scrubbing
Expansion of the dry scrubber decision guide for power plants,
incinerators, and other applications involving SDA, CFB and
DSI.
Click here to register
December 3, 2015 NOx Reduction
Decision guide to selection of SCR and SCR systems,
ammonia injection, reagents, catalysts for power plants
refineries, incinerators, chemical plants and other applications.
Click here to register
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Bob McIlvaine
President
847-784-0012 ext 112
rmcilvaine@mcilvainecompany.com
www.mcilvainecompany.com