April 2011 Vol. 66 No. 4


U.S. Pipe Demand To Reach $38.6B In 2015

U.S. demand for pipe is forecast to advance 6.6 percent per year to $38.6 billion in 2015. Gains will represent a substantial turnaround from the declines of the 2005-2010 period, during which pipe demand was hampered by an economic recession and a sharp drop in building construction spending.

Going forward, however, a number of factors, including a rebound in construction activity, an improved outlook for state and municipal infrastructure spending, will fuel strong increases in pipe demand an expansion of oil and gas exploration and transmission activity, and the continued need to replace and repair the country’s aging water pipe networks. These and other trends are presented in US Plastic & Competitive Pipe, a new study from The Freedonia Group Inc., a Cleveland-based industry market research firm.

Plastic pipe will be the fastest-growing pipe material through 2015, continuing to steadily take share from competing materials in a range of markets. Rising demand for plastic pipe will be driven by resin improvements that enhance pipe performance in more demanding environments, while processing improvements will allow plastic pipe to be more cost-effective compared to other materials. Polyvinyl chloride (PVC) will remain the leading resin used in plastic pipe through 2015, due to its dominant position in small-diameter applications such as potable water distribution, sanitary sewer and agricultural markets. High-density polyethylene (HDPE) pipe, however, has the best long-term growth prospects among major plastic pipe resins. HDPE will continue to gain ground on concrete, steel, PVC and other competing pipe materials, particularly in drainage, storm sewer and water distribution markets.

Steel pipe will remain the leading pipe material in the U.S. through 2015, accounting for 44 percent of the market in value terms (though only six percent by linear footage). Steel pipe will continue to be the dominant product used in the large oil and natural gas market, while retaining strong positions in applications such as storm sewer and industrial processing pipe. However, steel pipe demand will rise at a pace well below the overall average, restrained by a high degree of market maturity and competition from plastic pipe. Faster growth is forecast for concrete and ductile iron pipe. Copper pipe will also see above-average gains in demand, benefiting from a rebound in building construction and refrigeration equipment production.

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