Plastic pipe demand to rise, but ductile iron and concrete do better

Pipe made from concrete or ductile iron pipe is very heavy, and heavy too is the reliance of building engineers for decades on pipe made from these materials for infrastructure projects. The result? Despite being outclassed in many ways by plastics pipe, the two established materials are able not only to keep their share of the market but actually will increase market share at a faster pace than plastics.

All of this according to Large Diameter Pipe, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm. According to the report, the value of the large diameter pipe market will exceed $8 billion in 2015 as demand increases at a 6.2%/yr clip. Demand for plastics pipe will grow at a faster pace than that but, according to the report's authors, still will trail demand growth rates for concrete and ductile iron pipe in these applications.

The past few years have heralded a new era in large diameter plastic pipe extrusion, with plastics processors and extruder manufacturers helping speed developments, but based on this report's predictions they still have plenty of work to do to conquer the incumbent material's inertia. Lighter weight, easier installation and so forth are great arguments, but it remains much easier for a building engineer to specify the same material he always has than to transition to plastics.

Freedonia's report defines large diameter pipe as that with a diameter of 15 inches or more. According to the report, the demand for this pipe will rebound strongly from the declining demand of 2005-2010, in which large diameter pipe markets were negatively impacted by the 2007-2009 recession. Rising demand will be fueled by a more favorable environment for public infrastructure spending, as state and municipal governments faced severe budgetary constraints in 2010 that caused many major projects to be delayed. 

Sewers -- including both storm and sanitary sewers -- will remain the leading outlet for large diameter pipe through 2015, accounting for about half of total demand. Sanitary sewers will be the faster growing of the two sectors, with advances bolstered by rebounds in building construction spending and public infrastructure investment.  These factors will also drive rapid gains in demand for large diameter drainage and water transmission pipe.  Demand advances for oil and gas pipe -- one of the few markets to see healthy growth during the 2005-2010 period -- will decelerate through 2015, as pipeline construction activity slows, although the development of unconventional gas resources will continue to provide opportunities. 

Steel and concrete were the leading large diameter pipe materials in 2010, combining to account for about two-thirds of total demand.  However, steel will be the slowest-growing pipe material in value terms through 2015, restrained by moderating price increases, a deceleration in oil and gas applications, and market maturity in steel sewer pipe, according to the report. Concrete pipe will fare better, rising at an above-average pace and rebounding from significant declines in demand during the 2005-2010 period.  The most rapid gains in demand through 2015 will be for ductile iron pipe, driven by growth in the water and sanitary sewer markets. As with concrete, the bulk of these advances will be regaining demand levels lost during the 2007-2009 recession. 

The report does hold a bright outlook for plastics. Over the long term, the most favorable growth prospects are expected for large diameter plastic pipe, most notably high-density polyethylene (HDPE), but also polyvinyl chloride (PVC) and fiberglass pipe, says Freedonia.

 

 

US LARGE DIAMETER PIPE DEMAND

(million dollars)

 

% Annual Growth

Item     

2005

2010

2015

2005-

2010

2010-

2015

 

 

 

 

 

 

Large Diameter Pipe Demand

6294

6060

8200

-0.8

6.2

Steel

1854

2225

2800

3.7

4.7

Concrete

2350

1870

2640

-4.5

7.1

HDPE

722

763

1060

1.1

6.8

Ductile Iron

775

585

875

-5.5

8.4

PVC & Other

593

617

825

0.8

6.0

 

 

 

 

 

 

 (Chart courtesy of The Freedonia Group Inc.)

The 224-page report is available for $4900 from The Freedonia Group Inc. For further details, email Corinne Gangloff at [email protected] or visit the company's website.

 

 

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