Heat Exchanger Market

Market Overview

The global heat exchanger market size was valued at USD 17.5 billion in 2021 and is expected to reach USD 27 billion by 2030 growing at a CAGR of 5% during the analysis period (2022-2030).

The HVAC industry comprises heating, ventilation, and air conditioning systems used in residential, commercial, and industrial sectors. The industry is closely related to the construction industry and is driven by state and federal regulations. Currently, the demand for heating in buildings is higher than the demand for cooling across the globe; however, the need for cooling is gradually catching up in the food and pharmaceutical industries, according to the statistics provided by International Renewable Energy Agency (IRENA). Innovative technology is a significant factor driving the HVAC market over the coming years, owing to the rising demand for mobile apps that allow building managers to control HVAC systems from one centralized point. In addition, the increasing popularity of intelligent thermosets, which can detect additional measures such as motion, temperature, and humidity and can be easily integrated with systems such as Alexa and Google Home, is expected to drive the expansion of the HVAC market over the forecast period.

Rising demand for environment-friendly HVAC systems, like those that use solar panels or geothermal energy for cooling and heating to reduce energy consumption, is expected to propel market growth over the coming years. Furthermore, the rising demand for HVAC systems in the commercial sector, owing to the increasing construction of offices, merchandising sectors, and public buildings, is further expected to boost the product demand over the next coming years.

Market Dynamics

Global Heat Exchanger Market Drivers

• Growth of Chemical and Petrochemical Industries

According to the American Chemical Society, the chemical industry in the U.S. witnessed a growth of 2.5% in 2019 and 3% in 2020. Major factors augmenting the development of the chemical industry in the U.S. include the expanding domestic end-use sectors. The increased chemical demand from various end-use applications further encourages new capital investment in the chemical industry. Heat exchangers are required for cooling, heating, and mixing substances in the chemical production process. The rapid expansion of the chemical industry is expected to be a significant factor in driving the heat exchangers market.

According to Deutsche Bank, China is expected to account for 45% of the revenue share in the global market by 2020. The rapid expansion of the chemical industry in Asia, especially in China, is expected to act as a significant driving force for the heat exchangers market on account of vast product penetration in various applications, including solvent condensation, multiple material mixtures, benzene heat recovery, cooling of water circuits, cooling of hydrocarbons, heating & cooling of intermediate products, heating & cooling of reactors, and production processes.

• Growth of Power Generation Industry

Significant power markets such as China, the United States, India, Russia, and Japan are rebuilding their production systems to adopt the structure of sustainable energy and efficient energy usage by constructing heat exchangers and changing away from traditional energy use. Over the projection period, this is likely to stimulate demand for heat exchangers.

According to the 5th Strategic Energy Plan approved by the government of Japan in 2018, the number of renewable energy and nuclear power plants has witnessed significant growth to ensure the country's self-sufficiency for energy requirements. The increasing demand for power plants is anticipated to augment the heat exchangers market growth in the country.

Emerging economies like India, China, and Brazil are expected to witness an increase in power demand owing to the increasing development and economic growth and the improvement in the quality of life. Several governments have established incentives to promote innovations and installations to increase power supply and reduce polluting gas emissions. The advancement of renewable energy technologies coupled with the close monitoring of energy consumption has enabled rapid expansion in power plants.

Global Heat Exchanger Market Restraint

• Regulations on Curbing the Use of Fluorinated Greenhouse Gas in Heat Exchangers

Hydrofluorocarbon (HFC), a type of F-gas, is emitted by heat exchangers (when in use) in various applications such as blowing agents for foam, refrigerants in HVAC refrigeration, fire-extinguishers, air-conditioner, and heat pump equipment. Rising F-gas emissions, regulatory standards, and strict regulations regarding the emission of manufactured gas are predicted to hinder the growth of the heat exchangers market over the forecast period.

According to the European Environmental Agency (EEA), the F-gas emissions doubled from 1990 to 2014, whereas the emission of other greenhouse gases declined. In response to the rising discharge of F-gas, the European Union has adopted the MAC Directive and F-gas regulation to limit fluorinated gas emissions.

The European Union is taking initiatives to curb F-gas emissions by implementing heat exchangers as a part of its policy to combat climate change. The first regulation was adopted in 2006 and successfully stabilized the levels of F-gas by 2010. The next set of rules was followed in January 2015, introducing and strengthening the policies and regulations.

Future Growth Opportunities in Heat Exchanger Market

• Rapid Industrialization in the Asia-Pacific

Rapid industrialization in Asia-Pacific's growing countries, combined with rising investments in manufacturing, commercial, and industrial projects, has attributed to the region's overall rise in the heat exchangers market. This growth is due to the increased product penetration in various end-use industries, including power generation, petrochemicals, chemicals, HVAC & refrigeration, and food & beverage.

A significant shift in demand for heat exchangers is observed in mature markets such as Europe and North America and developing economies of Asia-Pacific, including China and India. The success of chemical industries in China can be attributed to the strong government influence, tightening of environmental regulations, high industry fragmentation, and the growing importance of specialty chemicals. The rising energy demand provides lucrative opportunities for the heat exchanger market growth.

Segmental Analysis

The global heat exchanger market share is decided based on product type, end-user, and region.

By product type, the global heat exchanger market is segmented into shell and tube, plate and frame, air-cooled, microchannel heat exchanger, and others. The shell and tube segment dominated the market in 2021 and is projected to remain the fastest-growing segment during the forecast period. It is valued at USD 6220 million in 2021 and is expected to reach USD 8900 million with a CAGR of 4% by 2030. This is due to its features over other heat exchangers, such as lower cost compared to plate-type coolers, ease of application at greater working temperatures and pressures, and others. Shell and tube heat exchangers are famous for their ease of maintenance and compatibility with a wide range of seawater coolants.

By end-user industry, the global heat exchanger market is segmented into chemical, petrochemical, oil and gas, power generation, HVAC and refrigeration, food and beverage, and others. The chemical segment dominated the global heat exchanger market in 2021 and is projected to remain the fastest-growing segment during the forecast period. It is valued at USD 3940 million in 2021 and is expected to reach USD 5740 million at a CAGR of 4% by 2030.

This is due to the widespread use of heat exchangers in the chemical industry, where they are used in various processes such as heating, cooling, condensing, distillation, isolation, and others. In addition, heat exchangers also withstand continuous chemical reactions, allowing critical processes to be completed safely and efficiently.

Impact of covid-19

The production of heat exchangers was halted for a specified period because of the peak point of COVID-19, which had a significant influence on heat exchanger revenues. As per the Organization for Economic Cooperation and Development (OECD), a jump in oil prices started during the lockout due to abundant availability and decreased demand, thereby boosting power generation. Nevertheless, due to the massive production of oil, COVID-19 does not affect the heat exchanger business.

Heat exchanger revenues are directly linked to the consumption of oil and gas. The COVID-19 epidemic restriction has badly damaged the oil and gas sector, and crude rates dropped dramatically in 2020 due to restarted overflow manufacturing. Conversely, the ongoing upstream efforts have not affected the need for heat exchangers.

COVID-19 hampered different industrial activities and disrupted the supply chain, affecting practically all sectors. Due to a shortage of workers, most firms have ceased operations. Furthermore, the worldwide heat exchanger market is experiencing a slow decline due to the influence of COVID-19.

According to the UNIDO, various businesses, including petrochemical, chemicals, petroleum & gas, HVACR, food and beverages, power generation, and other third-party vendors, relocated to their native lands owing to uncertainty and lost wages during the lockdown. This lack of workforce availability is projected to directly impact manufacturing and production operations, resulting in a decrease in demand for raw materials used in heat exchangers. This is projected to slow market growth during the forecast period.

Regional Analysis

The global heat exchanger market share is segmented as Europe, Asia-Pacific, North America, Central, and South America, Middle East, and Africa.

Which Region Accounts for Most Demand for Heat Exchanger?

The European economy dominated the market. It is valued at USD 5580 million in 2021 and is expected to reach USD 8025 million with a CAGR of 4% by 2030. The European region is characterized by several significant economies globally, such as Germany, the UK, France, Spain, Italy, and Russia.

The construction sector in the region is a significant buyer of chemicals and is expected to grow owing to several factors such as increasing infrastructure investments and low-interest rates. Thus, the demand for chemicals is expected to be stable in the coming years, thereby positively influencing the heat exchangers market. In addition, rising public and private infrastructure investments are expected to drive the demand for heat exchangers in the HVAC & refrigeration industry.

Increasing exploration & production activities in offshore areas are expected to fuel the heat exchangers market over the forecast period. In addition, several upcoming oil & gas projects in the European region are expected to impact the market in the coming years positively. Furthermore, there is an increasing demand from several end-use industries for heat exchangers that offer excellent durability, enhanced efficiency, and less fouling.

The Asia-Pacific is characterized by several developing countries such as China, India, Thailand, and Indonesia and developed nations like Japan and Australia. It is dominated the region in the global heat exchanger market. In addition, increasing investments in the chemical sector are expected to impact the heat exchangers market in Asia-Pacific positively. It is valued at USD 5370 million in 2021 and is expected to reach USD 8560 million at a CAGR of 5% by 2030. The expanding investments in the chemical, petrochemical, and HVAC sectors are expected to fuel the Chinese heat exchangers market.

In addition, several chemical and petrochemical multinational companies are expected to open new manufacturing plants in China owing to the favorable government policies. The country rising construction sector is expected to assist the expansion of the power generating and HVAC & refrigeration sectors. Factors such as the country's growing population and the government's attempts to improve the country's infrastructure are likely to favor the growth of the power generating and HVAC & refrigeration sectors, driving demand for heat exchangers in the future years.

Recent Developments

• In February 2020, Johnson Controls added wrap-around heat exchangers to its YORK solution outdoor and indoor air handling units to meet the rising demand for energy-efficient products globally.
• In December 2019, Johnson Controls became one of the first industrial companies to tie its line of credit in the U.S. syndicated loan market to sustainability performance.
• In July 2019, Chart Industries acquired Harsco Corporation'sCorporation's Industrial Air-X-Changers business. The latter is a leading supplier of custom manufactured and engineered air-cooled heat exchangers for the U.S's refining, petrochemical, natural gas compression, and processing industries.
• In November 2019, Mersen announced the acquisition of GAB Neumann GmbH, a Germany-based company engaged in designing and manufacturing silicon carbide and graphite heat exchangers that primarily cater to the chemicals market. This acquisition has further strengthened Mersen'sMersen's position in the chemicals industry.
• In January 2021, API Heat Transfer, Inc. announced to close Coventry, England, facilities due to a revenue drop caused by the COVID-19 outbreak and changes in a critical customer's purchasing decisions.

Heat Exchanger Market Segmentation

By Product Type

• Shell And Tube
• Plate And Frame
• Air-Cooled
• Microchannel Heat Exchanger
• Others

By End-User 

• Chemical
• Petrochemical
• Oil and Gas
• HVAC and Refrigeration
• Food and Beverage
• Power Generation
• Others

By Region

• Europe
• North America
• Asia-Pacific
• LAMA