U.S. demand for pipe is expected to grow 6.2 percent per year to $50.1 billion in 2016, driven primarily by a rebound in building construction. An expansion of oil and gas exploration and transmission activity, especially the development of shale plays, will also boost gains. In addition, the continued need to replace and repair the country’s aging water pipe networks will also contribute to growth. In length terms, pipe demand is forecast to expand at an 8.3 percent annual rate through 2016 to nearly 11 billion feet, totaling almost 83 billion pounds. Gains will result primarily from a turnaround in building construction. These and other trends are presented in Plastic & Competitive Pipe, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.
Plastic pipe will experience the fastest growth through 2016. Resin improvements that enhance pipe performance will enable plastic pipe to continue to take market share from other pipe materials in demanding applications. Additionally, processing improvements will allow plastic pipe to be a more cost effective option compared to other materials. Polyvinyl chloride (PVC), which accounted for over one-half of all plastic pipe demand in 2011, will remain the leading plastic resin based on PVC’s use in small diameter applications in the potable water distribution, sanitary sewer, and agricultural markets. Going forward, PVC demand will increase at a nearly double digit rate, benefiting from the recovery in building construction activity. High density polyethylene (HDPE) pipe was the second leading plastic pipe in 2011. Advances in HDPE pipe demand will result as the material continues to supplant concrete, PVC, and steel pipe in drainage, storm sewer, and potable water applications.
Steel pipe will continue to be the leading pipe material in value terms, accounting for $28.5 billion in 2016. However, growth in steel pipe demand will trail the pipe market as a whole, since it is not a beneficiary of the rebound in housing construction. Nevertheless, steel will continue to dominate the oil and gas market and is expected to benefit from continued exploration and drilling activity -- especially in shale gas plays. Concrete, ductile iron, and copper pipe are all forecast to post above average growth. Concrete and ductile iron pipe maintain a commanding share of the large diameter sewer, drainage, and water transmission market while copper is the primary material used in refrigeration equipment.