As Manufacturing PMI Dips, it Takes Down All Hopes for Normalcy in the Pressure Relief Valves Market. On Cards is a $657.5 Million Erosion in Revenues
The global market for Pressure Relief Valves is expected to decline by -15.3% in the year 2020 and thereafter recover and grow to reach US$4.6 billion by the year 2027, trailing a post COVID-19 CAGR of 3.4% over the analysis period 2020 through 2027. The mother of all manufacturing industries ranging from oil & gas, processing to paper & pulp, capital goods industry has been massively impacted by economic disruptions of COVID-19. Global economic activity is slumping with GDP growth forecast to dip as low as -4.9% in the year 2020. The manufacturing industry, which is the largest end-user of pressure sensitive valves, is the worst affected given its complex supply chains, labor intensive processes, and interdependencies. Division of labor, modular manufacturing strategies, outsourcing to reduce costs and increase the efficiency, consistency, and quality of each operations have made the manufacturing sector most vulnerable amid the lockdown restrictions. An indication of the grim state of affairs is the fact that global manufacturing PMI is already declining and will fall to an estimated all-time low in 2020 as compared to the 53.8 in 2019. With roots in China, the world’s supply chains are facing unprecedented disruption and shutdown. Interwoven with a demand crisis, the supply chain shocks are exerting a compounded blow to manufacturing companies worldwide. A combination of all the aforementioned macro-economic issues alongside more specific factors such as suspension of the transportation and changes in demand patterns have dealt a debilitating blow to the manufacturing industry.
The falling PMI indices indicates severe contraction of manufacturing activity including new orders, production, employment, supplier deliveries, inventories, customers’ inventories, commodity prices, order backlog, new export orders, and imports. Business investment confidence is tumbling amidst poor demand, falling profits, liquidity crunch and a reeling global economy. The "great lockdown" of 2020 has crushed the global economy and with it the manufacturing sector. The COVID-19 pandemic will have lasting long-term economic, social and political impact. As upstream, midstream and downstream sectors of manufacturing feel the ripple effect of disruption, pressure sensitive valves also a key part of the value chain is expected to feel the heat. Expenditure in the oil & gas and energy sector in 2020 is expected to decline by over $88.9 billion and $365 billion, while chemicals, mining, will see reductions of -30% and -27% respectively. Most CAPEX reductions have been to protect balance sheets, maintain shareholder pay-outs & preserve liquidity. As capital spending cuts sweeps through all industries, demand scenario for pressure relief valves, a vital safety component & feature in most processing equipment, remains poor.
Pressure relief valves refer to a type of safety valves which are designed to control or limit the pressure in a pressurized vessel or system. The primary purpose of a pressure safety valve is the protection of life, property and environment during an over-pressure event in a pressurized vessel or equipment. The most important safety devices in a production facility are the pressure relief valves, which ensure that pipes, valves, fittings, and pressure vessels are not subjected to pressures higher than their design pressures. When the pressure inside equipment such as boilers or pressure vessels increases beyond a specified value, the excess pressure may result in an equipment failure or fire. To avoid such a situation, pressure relief devices are used at predetermined set pressures to protect the equipment by relieving the excess pressure. The valve’s relief of elevated liquid, gas, or steam pressures prevents damage to the system or vessel. The safety valves open when a preset pressure is exceeded and automatically shut when pressure drops. Pressure relief valves are primarily installed in hydraulic systems to limit fluid pressure in the part of the circuit they are installed. The devices are used on all types of pressurized equipment from water heaters to power generation equipment, and even in spacecrafts. In the post COVID-19 period, stringent regulations on energy efficiency, several industries such as food processing, chemicals and other process industries will generate long term demand for pressure relief valves. Moreover, stringent government guidelines on industrial safety will also drive the market for pressure relief valves. In addition to process industries, the power generation industry is one of the major users of pressure relief valves. In the thermal power plants, pressure relief valves help in maintaining the pressure within the system, thereby averting costly accidents. As energy efficiency and industrial safety continue to garner interest among all stakeholders, demand for pressure relief valves is expected to grow steadily in future, after a temporary lull in 2020 and 2021. Competitors identified in this market include, among others,
- Alfa Laval AB
- Bopp & Reuther Messtechnik GmbH
- Curtiss-Wright Corporation
- Emerson Electric Company
- Flowserve Corporation
- GE Healthcare Life Sciences
- IMI Precision Engineering
- LESER GmbH & Co. KG
- NEWAY VALVE (SUZHOU) CO., LTD.
- Pentair PLC
- Valvitalia SpA
- Velan, Inc.
- Watts Water Technologies, Inc.
- Weir Group PLC