Iraq war boosts heat exchanger market
A
Frost and Sullivan product story
Edited by the Engineeringtalk editorial team
Sep 27, 2007
The heat exchanger market earned revenues of US $3.5 billion in 2006 according to research by Frost and Sullivan.
The Iraq war in 2003 constrained oil supply, pushing up oil prices.
This scarcity prompted the initiation of many projects related to gas to liquid (GTL), liquified natural gas (LNG) and ethylene crackers plants, which were on hold for many years.
As a direct consequence, the demand for heat exchangers has increased significantly.
New analysis from Frost and Sullivan, "European heat exchanger market", finds that market earned revenues of US $3.5 billion in 2006.
"The war affected the US economy, resulting in significant reductions in investment in the US petrochemical sector and refineries", note Frost and Sullivan Research Analysts Kaushik Ghosh and Debasmita Das.
"This provided great opportunities for manufacturers in Europe to breach the gap in investment, as they form the core end user sectors for the heat exchangers".
Currently, the European heat exchanger market is buoyant, growing at a rate of 10% annually.
Sectors like chemicals, fuel processing, power generation, pulp and paper, petrochemicals and oil and gas refineries have propelled the demand for heat exchangers.
"The future of the heat exchanger market in Europe, however, lies in the plate heat exchangers" Ghosh said.
"Their popularity is growing mainly due to the advantages they hold over shell and tube categories".
Plate heat exchangers are compact, can be modularised in different shapes and sizes, show increased efficiency in heat transfer, incur low installation and maintenance costs and can withstand high temperatures and pressures.
These advantages will lead to an increased replacement of shell and tube heat exchangers by plate heat varieties in the future.
Despite the high demand, scarcity and high prices of raw materials represent a serious impediment to heat exchanger manufacturers.
This, in turn, will increase their manufacturing costs, which suppliers have to transfer to end users to save their profit margins.
"Investing in exploration activities to discover new avenues for raw materials holds the key to checking raw material scarcity and its increasing price" Das said.
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