September 2015 - Water Market Insights 163

A small number of companies purchase a large percentage of industrial valves. The McIlvaine company in Industrial Valves: World Market identifies these companies and provides estimates of their yearly valve purchases.

The largest OEMS and EPCs account for more than 15 percent of the valve purchases. Of this total 4 percent is sold to the largest end users and 11 percent to smaller end users. The largest end users and OEM/EPCs combine for 34 percent of the total valve purchases. When additional purchase influenced by the top 20 design firms are included the total is 40 percent of all purchases.

Seventy-one OEM/EPCs spend $8690 million for valves for an average of $122 million each. Eight OEM/EPC companies supplying refinery systems account for valve purchases of $2.3 billion.

Liquid Filtration Market Will Be Slowed By Sinking Chinese Economy, Drop in Oil Prices and New Technology

The liquid filtration and elements market will grow by 15 percent through 2019 predicts the McIlvaine Company in N006 Liquid Filtration and Media World Markets. This forecast is predicated on oil prices of $80/barrel, a Chinese economic growth of 7 percent and modest penetration of the market from competing technologies. At $40/barrel oil, 2 percent economic growth in China and greater penetration of competing technologies, the growth over the next four years could be as low as 8 percent.

Oil prices, the Chinese economy and technology competition are three of the biggest variables in the future forecasts. In order to understand the impact on the total market one has to analyze each product type included in the report.

Subject	Market %	% consumables	Oil impact	China impact	Technology
ABW Filter	12	10	m	m	+
Bag Filter	14	90	l	m	-
Belt Filter Press	10	40	l	l	-
Drum & Disk	10	40	l	m	-
Filter Press	15	60	l	m	-
Granular Media Filter	25	10	l	m	-
Leaf, Tubular & Belt	14	30	m	m	-

Automatic backwash filters (ABW) represent 12 percent of the market. They are used in oil and gas production. China is a significant purchaser. This technology is gaining market share over cartridges (covered in a separate McIlvaine report). This increased penetration is included in the present forecast as indicated by the + in the table. Only 10 percent of the market is consumables, so ABW filters are more vulnerable to economic swings than are bag filters where 90 percent of the market is consumables.

The forecast already takes into account the lower market share for the other technologies. McIlvaine anticipates that membranes will continue to carve out a bigger share of the food market at the expense of leaf and disk filters. Under a tough competition scenario, the market would be reduced even further.

Oil prices impact those product segments where the oil and gas industry is a major purchaser. Some products e.g. belt filter presses, are sold primarily to sewage treatment plants and are not going to be impacted by changing oil prices.

There are many variables affecting the market. The Fukushima disaster alone accounted for a 1 percent increase in the market for a period of two years. The variables need to be continually evaluated. As a result, McIlvaine is updating its forecasts on a quarterly basis.

New power plants and large retrofit initiatives at existing plants generate very large revenues for flow control and treatment suppliers relative to water intake, coding, boiler feedwater and wastewater treatment. These are tracked weekly in the Utility E Alert. Managers and sales people will benefit greatly from this Alert which is only $950/yr. Here are some of the headlines in the issue last week:

§ Two Japanese Firms shortlisted for Matarbari, Bangladesh Coal-fired Power Plant

§ Toshiba wins EPC Contract for Harduganj Ultra-supercritical Power Project in India

§ Petrovietnam selects GE’s High-efficiency Steam Turbines for New Coal-fired Power Plant

§ Proposed AELs for Coal-fired Power Plants in Europe Would Tighten NO_x Permit Limits

§ DOE selects Eight Projects to receive funding for reducing Cost of CO₂ Capture and Compression

Toshiba Corp. announced that its Chennai, India unit Toshiba JSW Power Systems Private Ltd. has been awarded a full EPC contract by Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd or UPRVUNL in Lucknow, India. The value of the contract is about $540 million. Toshiba JSW will carry out the engineering, procurement, construction or EPC of the entire thermal power plant, including civil and boiler island package to be completed within 48 months from the contract award. Toshiba JSW will start delivering main equipment from October 2017, and the plant is expected to start its operation in September, 2019.

§ Water requirement for the proposed expansion will be 2,440 m³/hr. (24 cusec) with ash water re-circulation system.

§ Monitoring of surface water quantity and quality shall also be regularly conducted and records shall be maintained. The monitored data shall be submitted to the Ministry regularly.

§ Wastewater generated from the plant shall be treated before recycling/re-use to comply with the limits prescribed by the SPCB/CPCB.

§ Flyash shall be collected in dry form and storage facilities (silos) shall be provided. Unutilized flyash shall be disposed of in the ash pond in the form of slurry. Mercury and other heavy metals (As, Hg, Cr, Pb, etc.) will be monitored in the bottom ash and also in the effluents emanating from the existing ash pond. No ash shall be disposed of in low lying area. Flyash shall be transported by road through closed trucks only.

§ The ash pond shall be lined with HDPE/LDPE lining or any other suitable impermeable media such that no leachate takes place at any point in time.

“Power Plant Water Monitoring” is the Hot Topic Hour on September 24, 2015 at 10:00 a.m. CST

A webinar on September 24 at 10:00 a.m. central time will cover the options and issues regarding selection of fossil-fired plant water monitoring systems and instruments. There is a very ambitious goal to provide a website with the most comprehensive information on power plant monitors. 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 Water Monitoring Decision Guide is one of the subsidiary websites in both these knowledge systems.

This webinar will be focused on creating a Power Plant Water Monitoring Route Map and Summary which will help decision makers navigate the website. The first inputs to this Route Map are displayed at Power Plant Water Monitoring Route Map.

There is still time for vendors to submit one or two slides for the display deck. We intend to discuss issues during the session but due to the 90 minute limit most of the time will be just spent on determining which types of monitors are best suited for specific applications.

The website already exists with presentations, articles and recordings. This discussion will be followed by a continuing flow of additions to the system.

This webinar is free of charge. For more information on supplying data or participating contact Bob McIlvaine at rmcilvaine@mcilvainecompany.com.

This 40 minute webinar will review changes to the forecasts in Pumps: 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 pump industry will grow by 17 percent from 2015 to 2019 at oil prices of $80/barrel during the period. At $40/barrel, the growth will only be 3 percent.

There are a number of variables which will determine the market growth for pumps. New insights are continually generated which justify changes in the forecasts. The Iran nuclear agreement is just one example. The plunging economy in China is another. However, the most significant development recently is the plunge in oil prices to $40/barrel.

The industrial pump market is dominated by oil and gas which represents 24 percent of the present market. However water and wastewater, power, refining, petrochemical and other industries account for 76 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 16 percent of the present total pump market. The longer term large project revenues represent only 8 percent of the current market. If the price of oil were to continue to remain at $40/barrel through 2019, revenues in this segment would shrink over the period.

At $40/barrel oil the long range pump product revenue from the oil and gas large project segment would shrink by 75 percent from 8 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 remain flat during the four year period. In fact, the market for pumps for pipelines 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 pumps in the power market 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:

o Hydraulic fracturing break-even point is $30 to $50/barrel equivalent based on improved management practices and the extraction of more product from existing wells.

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 byproduct revenue.

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.

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.

Some of these developments are more predictable than others. The low oil prices leads 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.

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
Sept. 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
Sept. 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	NO_x 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