The year 2009 was a difficult one due to the global economic downturn for many control valve suppliers, with some of the key global suppliers suffering double-digit percentage revenue declines. Other suppliers’ shipments, however, were buoyed by the strong backlog they had at the beginning of the year.
Overall, shipments for control valves were down nearly 4 per cent from 2008. The current year, 2010, looks to be even more gruelling for control valve suppliers as they continue to face soft global demand, this time without the support of a healthy backlog. Despite the current pessimism, there remain a number of factors pointing towards long-term control valve growth according to a new ARC Advisory Group study.
Control valves are widely used in manufacturing applications to optimise production and lower cost in a wide range of industries, and are poised for moderate growth in the long term.
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, 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 pro-duction (such as oil sands), and increased investment in upstream oil & gas development and production in deep-sea fields.