Home » Control Valve Market Drops, Backlogs Shrink
Control Valve Market Drops, Backlogs Shrink
The issues control valve suppliers face in 2009 are very different from those they faced in 2008. In 2008, suppliers struggled to meet demand due to the robust growth occurring in developing markets, stretching their manufacturing capacities and pushing order backlogs to new highs. In stark contrast, in 2009, control valve suppliers face drops in control valve orders and declining backlogs. The worldwide market for control valves will decline over the next two years, but is expected to rebound in 2011, according to a new ARC Advisory Group (www.arcweb.com) study.
The dynamics of the global control valve market have changed dramatically as a result of the current global recession. "Over the previous four years, all of the control valve suppliers benefited from rapid growth in the market. The more aggressive companies, pursuing new business, grew even faster. With the onset of the global recession, however, control valve suppliers once again find themselves competing over a dwindling pool of opportunities. As a result, the ability to go out and acquire new business remains crucial, but holding on to the existing installed base of customers is now more important than ever for control valve suppliers," according to Senior Analyst David Clayton, the principal author of ARC’s "Control Valve Worldwide Market Outlook" report.
Perhaps the only thing standing between control valve suppliers and a precipitous decline in shipments for 2009 is their pre-existing backlogs. They began 2009 with huge backlogs amassed during the explosive growth of the past few years. Several control valve suppliers told ARC that it would take years for them to work off the backlog they had accumulated by the beginning of 2009. Although many of the leading control valve suppliers still have healthy backlogs, ARC is finding that many backlogs are quickly diminishing as growth in orders for control valves and aftermarket services continues to slow. However, due to the inherent complexity and long lead times of control valve shipments for multi-year projects, this backlog will not disappear overnight.
Long-Term Supply and Demand Issue for Oil Is Critical
The price, availability and demand for oil remain key factors in the overall health of the global control valve market. While ARC has seen a temporary reduction in demand for oil this past year and steep price declines, the long-term trend is clearly one of increasing demand amid shorter supply. In ARC's opinion, this will result in increased oil prices in the long term, increased investment in heavy oil production (such as oil sands), and increased investment in upstream oil-and-gas development and production in deep-sea fields. As of the publication of this report, prices have already started to increase. Many industry analysts expect a return to $85 a barrel oil within a year.
Developing economies such as China, India and Brazil also feel the effects of the global economic crisis, shedding many growth points compared to the extremely high growth levels experienced through 2008. The developing economies, however, are still the primary growth engine for the global control valve marketplace. Emerging economies, such as those in the BRIC (Brazil, Russia, India, and China) countries, the Middle East and Eastern Europe, will continue to prop up the global control valve market with increasing consumer demand from the growing global middle class, a healthy lending environment for capital investments that project solid returns, and the need for producing and saving energy to cope with rapidly rising energy demands and costs across the globe.
SANS Control Security Training Coming to Houston
SANS Institute will hold ICS Security Training event on June 10-15 in Houston
ISA Training Through June in Houston
Technician training, engineering survival and SIS boot camps for condensed, intense, comprehensive educational experience.
NIST Releases Initial Cyber Security Framework Comment Analysis
The National Institute for Standards and Technology has released an initial analysis of the hundreds of comments by industry and the public they have received on the Obama Administration's "Improving Critical Infrastructure Cyber Security" executive order.
Past Time to Upgrade Your DCS?
Upgrading Your DCS: Why You May Need to Do It Sooner Than You Think
Metso Provides New Heating Solution for Finnish Utility
Finland's largest pellet-fired heating plant produces environmentally friendly energy in Tampere
K-BIM Consortium Selects Siemens' Parasolid for New AEC Applications
-BIM, a consortium of commercial, academic and government organizations wants the new application suite to help create a national standard for building information management (BIM)
Friday p.m. Wrap-Up:This Week on ControlGlobal and Elsewhere
Some of the week's biggest stories in process automation
What's Bad Weather Costing Us?
U.S. taxpayers paid nearly $100 billion responding to damages caused by last yearís extreme weather events associated with climate change, about $1,100 per taxpayer, according to an analysis by the Natural Resources Defense Council (NRDC).
BP, Shell, Statoil Raided by EC
European Commission investigators raided the offices of oil companies BP, Royal Dutch Shell and Statoil as well as data collector Platts as part of a larger inquiry into price manipulation of the global crude market.
What We Can Learn About Safety from the Titanic Hearings
This report from the U.K. publication The Engineer is instructive. It reprints a report from the May, 1912 hearings on the sinking of the Titanic.
- All news »
Access the entire print issue on-line and be notified each month via e-mail when your new issue is ready for you. Subscribe today.
- Featured White Papers