HVAC Linesets Market

Market Overview

The global HVAC linesets market size was valued at USD 7.4 billion in 2022 and is projected to reach USD 16.2 billion by 2031, registering a CAGR of 9.1% during the forecast period (2023-2031). The growing use of HVAC for various reasons and technical improvements drive the HVAC Linesets market share.

HVAC line sets, known as refrigerant or copper line sets, play an essential role in heating, ventilation, and air conditioning (HVAC) systems. These lines connect an HVAC system's indoor and outdoor components, transferring refrigerant between the evaporator coil (placed inside) and the condenser coil (located outside). The refrigerant changes phases, taking heat from the inside air and releasing it outside, contributing to the heating or cooling process.

Urbanization and increased industrial construction are the key factors driving the HVAC Linesets Market growth. Urbanization rates in developed countries exceed 75%, whereas in developing countries, it is still in its early stages. New buildings in urban areas will increase electricity consumption primarily through demand for air conditioning and ventilation in hot and humid environments; additionally, the increasing trend of smart homes is contributing to the growth of this market.

Highlights

• Low Carbon generates the most revenue by material type.
• Retrofit is a significant contributor to the market based on implementation.
• Commercial end-users are the most common end-users in the market.
• Asia-Pacific dominates the global market.

Market Dynamics

Global Market Drivers

Growth in Construction and Infrastructure Development

The rise of the worldwide construction sector, driven by population increase, urbanization, and infrastructure projects, directly impacts the demand for HVAC systems, including critical components such as line sets. Large-scale urban development projects, such as residential complexes, commercial buildings, and infrastructure facilities (airports, hospitals, and so on), contribute significantly to the demand for HVAC systems. Linesets are critical in connecting these HVAC systems and maximizing their efficiency. For example, the Bharatmala Project. This project would boost connectivity by constructing 34,800 national highways and border roads. The project's budget is anticipated to be USD 130 billion.

According to Statista, the worldwide construction industry is expected to expand, with the construction market valued at more than 11 trillion US dollars by 2023. This expansion is suggestive of rising construction activity globally. According to the International Energy Agency (IEA), energy demand for space cooling (air conditioning) is anticipated to triple by 2050 due to population increase, rising affluence, and urbanization. This increase in demand highlights the importance of HVAC systems and, as a result, components such as line sets. As a result, as new buildings and infrastructure projects are built, HVAC systems become increasingly important in delivering comfortable and climate-controlled settings. HVAC line sets are critical components that allow these systems to operate efficiently by maintaining the correct refrigerant flow between indoor and outdoor units. Building and infrastructure development expansion is a significant driver of the HVAC line sets market trend.

Global Market Restraints

Fluctuating Raw Material Prices

Copper is the most common material used in HVAC line sets. Copper prices are impacted by market phenomena such as global demand, supply disruptions, and economic conditions. Copper price fluctuations can affect the manufacturing costs of HVAC line sets, posing pricing and profit margin problems for producers. According to a CNBC story, Copper prices will likely rise by more than 75% over the next two years. This is due to disruptions in mining supply networks and rising metal demand. Citibank expects copper prices to reach USD 15,000 per ton in 2025, a 40% increase from the USD 10,730 per ton price recorded in March 2023. 

Additionally, according to data from the London Metal Exchange (LME), copper prices have fluctuated significantly. Copper prices, for example, reached historical highs in 2011, reaching USD 4.50 per pound. Prices fell to roughly USD 2 per pound in 2016 due to concerns about global economic development. Volatility fluctuated in subsequent years, affected by trade disputes and economic uncertainty. Continuous monitoring of copper prices is critical for HVAC line set producers to adjust pricing strategies in response to market conditions. As a result, rapid spikes in copper prices might result in higher raw material costs for businesses, reducing profit margins. Due to volatile raw material costs, manufacturers may need to help to maintain consistent and competitive product pricing.

Global Market Opportunity

Growing Demand for Energy-Efficient Solutions

Due to environmental concerns and regulatory regulations, building systems increasingly emphasize energy efficiency. This presents a considerable opportunity for HVAC line sets to improve system efficiency. Advanced insulating materials, such as low thermal conductivity foam or coatings, can be used in line sets to reduce heat transfer during refrigerant transmission. This decreases energy losses and enhances the HVAC system's overall efficiency. According to the International Energy Agency (IEA) publication ""Energy Efficiency 2020,"" increasing energy efficiency is critical for attaining sustainability goals. According to the International Energy Agency (IEA), the average annual pace of global energy intensity improvement must double from 2% to more than 4% between 2020 and 2030. This is an essential indicator of the economy's energy efficiency. Increasing efficiency by a factor of two to above 4% each year would reduce world energy demand by 190 EJ and CO2 emissions from fuel combustion by nearly 11 Gt by 2030.

Furthermore, HVAC systems, especially line sets, are critical to improving building energy efficiency. The paper emphasizes that enhancing building energy efficiency can considerably reduce global energy-related CO2 emissions. As a result, HVAC line set manufacturers can benefit from this potential by designing and promoting energy-efficient solutions. Linesets with improved insulating qualities can reduce the energy consumption of HVAC systems, lowering end-user operational expenses. Many countries have enacted or are contemplating strict energy efficiency rules for buildings. The International Energy Conservation Code (IECC) and ASHRAE 90.1 are two of the most widely used building energy efficiency standards in the United States. The IECC establishes minimum efficiency requirements for new commercial and residential building systems' heating, ventilation, water, lighting, and electricity usage. Significant increases in energy efficiency criteria for new commercial and residential buildings are included in the 2021 IECC. HVAC line sets built for maximum energy efficiency can assist manufacturers in reaching these regulations and contributing to long-term sustainability goals.

Regional Analysis

Asia-Pacific Dominates the Global Market

The global HVAC linesets market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific is the most significant global HVAC linesets market shareholder and is estimated to grow at a CAGR of 9.3% over the forecast period. Asia-Pacific is anticipated to dominate the market during the forecast period, owing to its large population and rapid industrial growth. The changing consumer lifestyle and rising disposable income in emerging markets such as India, China, Cambodia, and Japan drive regional market growth. According to the Central Intelligence Agency (CIA), the industrial sector is the second largest contributor to the Australian economy's GDP, accounting for 25.69% in 2020. This includes mining and manufacturing, which account for approximately 5.8% of GDP. China has the highest demand for HVAC line sets due to the enormous commercial and residential construction growth. As a result, the country is heavily investing in various large-scale commercial construction projects throughout the region, which is expected to increase demand for HVAC line sets.

Similarly, Cambodia's HVAC (Heating, Ventilation, and Air Conditioning) market, particularly the commercial air conditioning market, is expanding due to increased investment in Phnom Penh-area shopping centers, hotels, and factories. With the overall HVAC market expected to grow at a 10% annual rate over the next five years, Cambodia is a promising market, with demand for residential use expected to rise due to future population growth. Furthermore, according to the Japan Refrigeration and Air Conditioning Industry Association (JRAIA), the world's total air conditioner demand in 2021 is expected to be 110,041 thousand units, representing 102% of the world demand the previous year. China is expected to have the highest demand, with 41,035 units accounting for 98% of the total market in 2020.

North America is anticipated to exhibit a CAGR of 9.5% over the forecast period. The market in North America is expected to proliferate in the coming years due to strict government regulations and increased industrial growth. The rising disposable income and urbanization are attributed to regional market growth. Increased investment in developing new technologies and well-developed infrastructure will boost the region's market. According to the United States Census Bureau, the total construction value in 2021 will be USD 1,625.9 billion. This was 0.4 percent higher than the revised October estimate of USD 1,618.8 billion. Total construction spending was USD 1.98 trillion in August 2023, a 7.4% increase over the previous year. This total spending was driven primarily by nonresidential construction spending, which increased 17.6% yearly in August 2023.

Furthermore, North America has proactively enacted energy efficiency standards, influencing HVAC trends. For example, HVAC systems meeting ENERGY STAR standards are popular, extending to components like linesets that contribute to overall system efficiency. North America has proactively enacted energy efficiency standards, influencing HVAC trends. Improving building energy efficiency is critical to Canada's plan to reduce greenhouse gas emissions by 40-45% by 2030 and achieve net-zero emissions by 2050. 

The European HVAC linesets market is vital to the region's more significant HVAC industry. Climate variations, construction activities, and regulatory initiatives impact the demand for HVAC systems and components, including linesets according to HVAC Linesets Market insights,. The market caters to many European residential, commercial, and industrial applications.

Segmental Analysis

The global HVAC linesets market is segmented based on material type, application, end-user, and region.

The market is further segmented by material type into Low Carbon and copper.

Low Carbon generates the most revenue in the market.

Low Carbon

Due to its applicability and versatility, the low-carbon segment is expected to proliferate during the projection period. Low-carbon steel is a type of material with a low carbon content. Low-carbon materials are characterized by their malleability, weldability, and versatility. Due to their ability to undergo deformation and fabrication processes, these materials are widely used in various industries. Low-carbon materials may provide cost-effectiveness and specific mechanical properties suitable for manufacturing certain components in the context of HVAC line sets, contributing to the overall performance and durability of the line sets.

Copper

Copper is a versatile and widely used material in HVAC line set fabrication. Copper linesets, known for their excellent thermal conductivity, corrosion resistance, and durability, facilitate refrigerant transfer between indoor and outdoor HVAC units. The inherent properties of copper make it ideal for ensuring efficient heat exchange processes in HVAC systems. It is easy to shape and install because of its malleability, contributing to the overall reliability of HVAC line sets. While copper linesets are more expensive than some alternatives, their performance characteristics frequently justify their use in HVAC system critical components.

The market can be bifurcated by application into Retrofit and New Construction.

Retrofit is a significant contributor to the market.

Retrofit

The retrofit sector is expected to proliferate throughout the projection period since it is a low-cost option to improve system performance without replacing the complete system. Replacing or augmenting old structures or systems with newer and more modern components or technology is retrofit. The retrofit application of HVAC line sets is replacing or improving line sets in existing buildings or HVAC systems. This could be done to increase energy efficiency, comply with new requirements, or fix system performance issues. 

New Construction

New construction involves installing line sets in newly built structures or HVAC systems. Incorporating HVAC line sets as part of the initial building phase ensures that the line sets are easily integrated into the overall HVAC system design. New construction projects provide an opportunity to optimize the HVAC system architecture, choose materials based on specific design specifications, and guarantee that line sets are installed efficiently and effectively.

Based on end-user, the market is fragmented into Commercial, Residential, and Industrial.

Commercial end-users are the most common end-users in the market.

Commercial

The commercial segment is anticipated to proliferate during the forecast period due to the increasing demand for cooling solutions such as air conditioners required by banks, offices, the hospitality sector, supermarkets, and hypermarkets. HVAC linesets designed for commercial use should be able to meet the specific needs of these various spaces, considering factors such as system size, zoning, and energy efficiency. Linesets play an essential role in ensuring the proper flow of refrigerant for efficient heating and cooling in commercial applications, which frequently involve complex HVAC systems.

Residential

Individual homes, apartments, and other housing structures are included in the residential segment of the HVAC linesets market. Residential linesets are designed to meet the needs of smaller-scale HVAC systems found in homes. These line sets must be efficient, compact, and aesthetically pleasing in residential environments. Residential HVAC line sets are critical in providing homeowners with adequate heating and cooling solutions. As the residential construction and retrofitting markets expand, so does the demand for linesets that offer performance and space-saving features for home comfort systems.

Recent Developments

• September 2023- KOVA Comfort Intelligent HVAC is a new product from KOVA, a leader in building material solutions. It is a cutting-edge artificial intelligence-powered HVAC system that seamlessly integrates into any construction project. It creates a healthy, pleasant environment depending on several inputs, including users' daily activities.
• December 2023- Daikin Industries, Ltd founded Daikin Airconditioning (Cambodia) Co., Ltd.
• June 2023- Mitsubishi Electric Trane HVAC US LLC, a prominent producer of ductless and VRF systems in the United States and Latin American countries, has introduced the Hybrid VRF. It's a ground-breaking two-pipe VRF zoning technology that uses water instead of refrigerant in indoor settings.