Global Demand for Plastic Pipe to Reach 11.2 Billion Meters in 2017

Global demand for plastic pipe is projected to rise 8.5% annually through 2017 to 11.2 billion meters, improving significantly from growth posted between 2007 and 2012. Advances will come in large part from increased construction spending in all global regions, since plastic pipe is most heavily utilized in construction applications. In addition, a rebound in the key US market will spur growth. Plastic pipe will also gain market share as it continues to replace other materials, such as copper, concrete, and steel, due to its low cost, installation ease, and performance advantages. These and other trends are presented in World Plastic Pipe, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.
   PVC is by far the most widely used pipe resin, accounting for over 55% of global plastic pipe demand in 2012. Going forward, however, HDPE is expected to take market share from PVC in a variety of construction applications. For instance, as PEX becomes more common in many regional markets, the material will supplant PVC potable water distribution pipe. Additionally, fiberglass - demand for which has historically been limited because of its high price - is beginning to be utilized in a wider array of water and wastewater settings because of its performance advantages.
   Demand gains in terms of weight will benefit from plastic’s increased use in larger diameter pipe. The majority of large diameter plastic pipe is used in infrastructure applications, such as potable water transmission and sewer and drainage networks. In many developed countries, decaying infrastructure will boost gains. As sewer and water transmission systems are replaced, many countries will choose plastic pipe due to its lower cost and installation ease. In developing nations, investment in local water and wastewater infrastructure will stimulate demand.
   Construction related applications will provide the most impetus for growth in plastic pipe demand in all global regions. For example, recovery in the US construction industry will result in double-digit gains in pipe demand. China, which maintains the world’s largest construction market, will also contribute greatly to growth.
   While plastic pipe use is not as widespread in the oil and gas and process manufacturing markets, improvements in resin formulations have enabled plastic to increase its market share in recent years.
   In addition, Freedonia forecasts that global demand for water pipe would increase 7.5% per year through 2017 to 10.9 billion meters, a significant acceleration from the pace of the 2007-2012 period. Advances will result from two key factors: in developing nations access to water supply and sanitation will be increased, while in developed nations a rebound in construction spending will boost demand for building pipe. Plastic pipe will post the best gains as it continues to displace concrete and metal in a range of markets, particularly water distribution. Steel pipe, which is commonly used in drainage applications, will benefit from gains in nonbuilding construction.
   China alone is forecast to account for one-third of the increase in global water pipe demand generated between 2012 and 2017. A significant percentage of China’s vast population does not have access to a piped water supply, but such infrastructure development will remain a priority during the forecast period, stimulating demand.  Other industrializing countries in Asia - such as India and Indonesia - and in the Africa/Mideast region will also make important contributions to overall water pipe demand.
   Buildings will remain the leading market for water pipe through the forecast period, largely due to recovery in building construction, particularly in the key US market. Gains in transmission and service applications will be prompted by expansion of water supply services, to which access in many developing countries remains low. The sewer and drainage market will also post strong gains as developing nations boost efforts to improve sanitation systems. Both of these trends will prompt solid long term growth prospects for water pipe, as even a robust level of growth in developing markets will leave several hundred million people without access to safe water or even minimal sanitation facilities. Demand gains for irrigation pipe will lag the industry average, as ditch irrigation remains common in many developing areas. However, efforts to conserve water and boost crop production will support growth for pipe-using irrigation systems.

Table 1  World Plastic Pipe Demand (million meters, %)
Item    2007    2012     2017    YoY Growth 2012-2017    YoY Growth 2007- 2012
Plastic Pipe Demand    6655    7475    11240    2.4    8.5
North America    2215    1530    2440    -7.1    9.8
Western Europe    1415    1205    1535    -3.2    5
Asia/Pacific    2015    3390    5385    11    9.7
Central & South America    320    450    610    7.1    6.3
Eastern Europe    315    375    505    3.5    6.1
Africa/Mideast    375    525    765    7    7.8