Demand for large-diameter pipes for water and wastewater is set to increase over the next four years in the United States, as spending on related infrastructural projects is expected to drive sales up, according to two new reports from The Freedonia Group.
The first report predicts that water and wastewater pipe demand will go up at an annual rate of about 9.2 percent, to reach a total of $17.8 billion in 2016. Plastics are expected to register the fastest growth in terms of material, whereas other materials are likely to lose some market share, The Freedonia Group found. Sewers will still be the leading market for large-diameter pipe over the next few years, accounting for half of the total U.S. demand.
In a separate report the group estimated that large-diameter pipe demand in the U.S. is projected to increase by 6.2 percent per year to 197 million ft, fueled by a pickup in activity of infrastructure projects that had been stalled during the economic downturn. With economic conditions set to improve over the next few years, such projects will be moving forward and the need for repair and replacement of wastewater pipes will cause a boost in demand, the report claimed.
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Another factor that is expected to bolster large-diameter pipe demand is the introduction of new, more stringent rules for combined sewer overflows, set by the Environmental Protection Agency (EPA). This means that many local authorities will have to replace old sewer systems and invest in new ones. The Freedonia Group noted that the U.S. drainage market is likely to see the sharpest growth in pipe demand through 2016, as construction activity gathers speed, particularly in the southern and western states, where the U.S. population is migrating.
Last but not least, the boom in oil and gas production in certain parts of the United States indicates that large-diameter pipes will be needed in forthcoming transmission line expansions, most specifically in the vicinity of shale plays and other non-traditional wells, The Freedonia Group pointed out.
Meanwhile, the report revealed that the most commonly used materials for production of large-diameter pipes are steel and HDPE, both representing 31 percent of the total output. HDPE is predicted to record above-average growth, because the material is increasingly being used to replace other materials in a number of applications. In many drainage applications, for instance, concrete pipe will be replaced by corrugated HDPE because the latter is much lighter and easier to install.
The report forecasts an average growth rate for HDPE of 6.9 percent per year through 2016. Similarly, PVC pipe will see an annual growth rate of 5.7 percent over the same period. The report is based on analysis of the U.S. large diameter pipe industry, projecting data for 2016 based on historical demand evidence for the years 2001, 2006 and 2011. It covers different markets, such as sewers, drainage, oil and gas, water transmission, industrial processing and irrigation, and various materials, including steel pipe, high density polyethylene, concrete pipe, polyvinyl chloride, ductile iron and fiberglass.
