This page contains a Flash digital edition of a book.
MECHANICAL CONTRACTING e Continued from p 54 | PVF MARKET REPORT |


difficulty in securing financing. Concern as to the future of the markets


for the fossil fuel power industry, nuclear power, oil and gas shale projects and deep water drilling have heightened due to the enormous set of EPA regulations that is about to be released. The most volatile issue facing our


industry is the Instability in the world arena particularly in the Mid-East and the effect on the cost of energy (oil). Demand from the energy related market continues to be the driving force for the PVF industry. The continued threat of pending EPA regulations, political posturing on a domestic energy policy (what policy?) plus the increasing concern over local, state, and federal debt are all issues that affect the volatility of the PVF market. The need for energy will increase the


56


need for developing nuclear, clean coal, gas turbine power plants along with shale oil and gas field development will continue to be the driving forces during the remainder of 2011 and 2012.”


Forged Steel Fittings Pricing:


Forged steel fittings are


forecast to remain stable through the third quarter following a 10% increase during the second quarter due to raw material costs. Lead Times: Commodity material fill


rates are forecast at 80% - 90% with lead times for commodity material not in stock running 2 – 4 weeks. Comments: Manufacturers have


accommodated a higher demand associated with a somewhat robust energy demand. The increased production has increased fill rates and shortened lead times. Price pressure remains on “special bar quality steel” used to produce forged steel fittings and unions. The pressure is a result of increased demand from the automotive industry. A raw material increase is forecast for August, but will not translate into a forged steel increase. The energy business, particularly the


oil patch segment, remains robust with current levels forecast through the end of the year. The rig count continues to increase with a total of 1,905 during the week ending July 15th. Oil exploration continues to dominate the rig count 1,013 versus 892 for natural gas. Natural gas prices have remained low for the two years due to record production overwhelming demand. Continued high oil prices, in contrast to depressed natural gas prices, facilitate the rig count moving towards oil. The Eagle Ford and Bakken Shale plays continue to gain strength. Bakken has slowed in recent months with wet weather and flooding preventing activity. These areas will continue to grow with increase end user


activity accompanied with increased distributor locations. The industrial business continues to lag behind energy. We have viewed a slight increase, yet it is too early to determine staying power. One manufacturer comments that we


continue to view the government’s fiscal policies and regulations as factors attributing towards the sluggish economy. The current administration has yet to adopt a comprehensive energy policy with uncertainty rampant industry wide. The industry has two issues pending which could reduce energy exploration: West Texas Sand Lizard and hydraulic fracturing under legislative pressure. If the Sand Lizard is placed on the endangered species list, West Texas oil and gas production will drastically be reduced. Hydraulic fracturing is being questioned by many states, potentially leading to reduce production.


Stainless Steel Gate, Globe, and Check Valves


Pricing: Pricing for stainless steel


gate, globe and check valves is not forecast to change thru the third quarter following a 2% - 7% increase in the second quarter. Lead Times: Fill rates for commodity


valves is running at 75% - 85%. Lead times for commodity valves not in stock are forecast at 6 - 10 weeks and non- stock specials with lead times of 16 - 20 weeks. l Comments: There is an increase in


market spend in the industrial sector while the commercial sector remains slow.


Bronze and Iron Gate, Globe, and Check Valves


Pricing: Bronze and iron valves


are not forecast to change during the third quarter. This follows second quarter increases of 5% - 7 ½%. However, raw material costs of bronze ingot have increased greatly and are expected to continue. More price increases will probably follow by year- end. Lead Times: Fill rates for Bronze and


Iron valves continue at 70% - 80%. Lead times for Bronze and Iron valves are forecast for 4 - 8 weeks. Comments: Overall demand for


bronze and iron valves has been steadily increasing. The pulp and paper business is stable, chemical plant opportunities increasing and mechanical construction remains at lower levels according to manufacturers. One manufacturer indicates their Iron Valve demand is up over 40% in 2011 over 2010.


Cast Steel Gate, Globe, and Check Valves


Pricing: Cast steel valve


manufacturers indicate no change forecast for the third quarter. This


follows 5% - 10% increases in the second quarter 2011 due to raw material costs. Lead Times: Fill rates running at 70%


- 80% with forecast lead times of 4 – 8 weeks for commodity valves. Non- commodity valves are shipping in 12 - 16 weeks. Comments: Raw material costs have


increased in the past six months, but have now stabilized.


Forged Steel Gate, Globe, and Check Valves


Pricing: No price change


expected for forged steel valves over the third quarter. Lead Times: Lead times continue to


run 6 - 8 weeks for forged steel valves with fill rates of 50% - 60% for commodity valves. Non-stock specials are forecast with lead times of 12 – 16 weeks. Comments: Molybdenum has


remained fairly steady since March. Nickel prices dropped significantly from April to May and have since been steady. Chromium and Carbon Steel Prices were steady during the second quarter. The main issue for forged steel valve manufacturers is the price pressure from foreign manufacturers. Less domestic manufacturing is a continuing theme in the industry.


Quarter Turn Valves — Ball and Wafer


Pricing: Quarter turn valves are


expected to remain steady for the third quarter. There is concern over an increase in surcharges mainly impacting stainless steel. Lead Times: Fill rates for quarter turn


valves are approximately 60% - 70% with lead times running 4 - 6 weeks. Non-commodity specials are forecast for delivery in 12 - 16 weeks. Comments: Manufacturers comment


that key industries like chemical and petrochemicals are poised for increases, but economic conditions (deficit, high unemployment, etc.) may set the economy back and delay projects. The biggest change in the valve industry is supply. Manufacturers depend more on outside sources (foundries in other countries for example) to keep products moving through factories. Supplies of castings must meet commitments and they are often at overcapacity. ;


Printed by permission 2011 Piping & Equipment, Inc. Unauthorized reproduction of any portion of this document is forbidden without the written permission of P&E. This report is published as a service to the PVF industry indicating the direction of prices, lead times and market conditions reported by various domestic and import manufacturers as they believe the direction the market is heading each quarter.


phc december 2011 www.phcnews.com


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116