Recently, the Organisation for Economic Co-operation and Development (OECD) released its latest mid-term economic outlook report. The report expects global GDP growth to be 5.8% in 2021, compared with an earlier forecast of 5.6%. The report also predicts that among G20 member economies, China’s economy will grow by 8.5% in 2021 (compared to a forecast of 7.8% in March this year). The continuous and stable growth of the global economic aggregate has driven the development of downstream valve industries such as oil and natural gas, electric power, water treatment, chemical industry, and urban construction, resulting in rapid development of the valve industry and significant market activity.
A. Development status of China’s valve industry
Through the joint efforts and independent innovation of manufacturing enterprises and various parties, my country’s valve equipment manufacturing industry has been in recent years in nuclear power plant nuclear-grade valves, all-welded large-diameter ball valves for long-distance natural gas pipelines, key valves for ultra-supercritical thermal power units, petrochemical fields, and power station industries. Some high-end valve products under special working conditions have made breakthrough progress, and some have achieved localization, which not only replaced imports, but also broke foreign monopoly, driving industry transformation and upgrading and scientific and technological progress.
B. Competition pattern of China’s valve industry
China’s valve manufacturing industry has weak bargaining power for the upstream raw material industry, a large number of domestic low-end products are in the stage of price competition(wafer butterfly valve, lug butterfly valve, flanged butterfly valve,gate valve,check valve,etc) And the bargaining power for the downstream industry is also slightly insufficient; with the continuous entry of foreign capital, its brand and technology aspects The entry of foreign capital will bring huge threats and pressures to domestic enterprises; in addition, valves are a kind of general machinery, and general machinery products are characterized by strong versatility, relatively simple structure and convenient operation, which also leads to easy Imitation manufacturing will cause low-level repetitive construction and disorderly competition in the market, and there is a certain threat of substitutes.
C. Future market opportunities for valves
Control valves (regulating valves) have broad prospects for growth. The control valve, also known as the regulating valve, is a control component in the fluid conveying system. It has functions such as cut-off, regulation, diversion, prevention of backflow, voltage stabilization, diversion or overflow pressure relief. It is one of the core components of intelligent manufacturing. The fields include petroleum, petrochemical, chemical, papermaking, environmental protection, energy, electric power, mining, metallurgy, medicine, food and other industries.
According to ARC’s “China Control Valve Market Research Report”, the domestic control valve market will exceed US$2 billion in 2019, with a year-on-year increase of more than 5%. It is expected that the compound annual growth rate will be 5.3% in the next three years. The control valve market is currently dominated by foreign brands. In 2018, Emerson led the high-end control valve with a market share of 8.3%. With the acceleration of domestic substitution and the development of intelligent manufacturing, domestic control valve manufacturers have good growth prospects.
Domestic replacement of hydraulic valves is accelerated. Hydraulic parts are widely used in various types of walking machinery, industrial machinery and large equipment. The downstream industries include construction machinery, automobiles, metallurgical machinery, machine tools, mining machinery, agricultural machinery, ships, and petroleum machinery. Hydraulic valves are the core hydraulic components. In 2019, hydraulic valves accounted for 12.4% of the total output value of China’s hydraulic core components (Hydraulic Pneumatic Seals Industry Association), with a market size of about 10 billion yuan. At present, my country’s high-end hydraulic valves rely on imports (in 2020, my country’s hydraulic transmission valve exports were 847 million yuan, and imports were as high as 9.049 billion yuan). With the acceleration of domestic substitution, my country’s hydraulic valve market has grown rapidly.
Post time: Jun-24-2022
