Metal Valve Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 950 metal valve manufacturers in the US produce devices that control, regulate, or isolate the flow of fluids and gases. Major valve categories include automated; ball; gate, global, and check; industrial butterfly; plug; and pressure relief. Large firms typically manufacture complementary products, such as pipes, fittings, instrumentation, control systems, and pumps. Customer industries include chemical; water and wastewater; petroleum production and refining; power generation; oil and gas transmission; pulp and paper; commercial construction; and food and beverage.

Dependence on the Health of Customer Industries

Demand for metal valves is heavily dependent on the health of end-use markets, such as the petroleum, chemical, and water/wastewater industries.

Foreign Production and Competition

Many large firms have operations and business in foreign countries, exposing them to changes in trade policy, fluctuations in currency rates, and uncertainty due to political instability.

Industry size & Structure

The average metal valve manufacturer employs between 55 and 110 workers and generates between $18 million and $53 million annually.

    • The metal valve manufacturing industry consists of about 950 firms that employ 90,000 workers and generate over $30 billion annually.
    • The industry is highly concentrated; the top 50 companies account for between 80% and 99% of revenue, depending on the category.
    • Large US firms include divisions of Emerson (Fisher), Parker Hannafin, and Crane, Mueller Water Products, and Watts Water Technologies. The industry also includes large multi-national conglomerates headquartered in foreign countries.
    • The North American valve manufacturing industry supplies about 35% of worldwide valve demand, according to the Valve Manufacturers Association (VMA).
                                  Industry Forecast
                                  Metal Valve Manufacturers Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  Jun 30, 2022 - Manufacturers Seek Clarity on Buy American Act
                                  • Manufacturers are seeking clarity on the definition of what operations must be performed in the US to constitute as domestic “manufacturing” under the Buy American Act (BAA). The BAA establishes a preference for the purchase of items manufactured in the US by government agencies. However, the courts, the US Government Accountability Office, and federal regulations all have different definitions about what it means to “manufacture” an item. For iron and steel, every manufacturing stage has requirements about what processes must be done in the US for domestic preference. The finishing operations such as packaging and painting, however, are not considered “manufacturing” of the product. The US Office and Management and Budget (OMB) is now seeking public feedback to clarify how much of the manufacturing process has to be done in the US to determine if the end product can be considered manufactured in the US.
                                  • In early June 2022, President Biden invoked the Defense Production Act (DPA) to boost the manufacturing of solar panels, electric transformers, heat pumps, insulation, and hydrogen-related equipment. The DPA determinations provide the Department of Energy (DOE) with the authority to the DPA to accelerate domestic production of clean energy technologies. Congress has appropriated about $888 million in DPA funding through Fiscal Year 2022 and pending legislation for another $100 billion in DPA funding for the clean energy sector. According to the US Department of Energy, the funding “will allow the federal government to invest in companies that can build clean energy facilities, expand clean energy manufacturing, process clean energy components, and install clean energy technologies for consumers”.
                                  • Orders placed with US factories for durable goods rose in May, an indication of firm and sustained demand for equipment and merchandise. New orders for durable goods increased 0.4% month-over-month in May, following a slight downwardly revised 0.4% rise in April and triple the forecasts of 0.2%, in a sign business spending moderated, Commerce Department figures show. Orders for transportation equipment rose 0.8%, machinery (1.1%), and computer and electrics (0.5%). Excluding transportation, new orders rose 0.7% and orders for nondefense capital goods excluding aircraft, a closely watched proxy for business spending plans, edged up 0.5%, above 0.3% in April, Trading Economics reported.
                                  • Rebounding demand and rapidly rising prices for steel are boosting profits for US steelmakers and costing their customers more. Strength in the market is helping the nation’s steel producers offset rising raw materials costs, triggered by the conflict in Ukraine. Steelmakers in April 2022 said demand is rising after a slump earlier in the year, driven by strength in the commercial construction and heavy equipment industries and gradually expanding automotive production, according to The Wall Street Journal. “Overall, the end markets that we serve, the underlying demand remains incredibly robust,” Leon Topalian, CEO of Nucor, told the Journal in April. Rapidly rising steel prices allowed companies to turn in better-than-expected profits despite higher costs for raw materials in the first quarter.
                                  • The global market for industrial valves is estimated to be worth about $71.8 billion in 2022. With rising adoption of industrial valves for regulating the flow of materials, overall demand is anticipated to grow at a CAGR of 4.3% between 2022 and 2029, reaching a market value of $96.2 billion by the end of the decade, according to Future Market Insights (FMI). On a regional basis, Asia Pacific Excluding Japan (APEJ) will continue to dominate the global industrial valves market, accounting for a share of 42.2% in 2022. Rapid industrialization, surging oil & gas activities, and expansion of residential and commercial sectors are some of the factors driving the industrial valves market in APEJ, according to the FMI report.
                                  • The price of iron and steel jumped 27.5% in May 2022 compared to a year ago. However, the metal valve manufacturing industry is likely to see greater supply and cost relief as lower-priced imports enter the US market. In February 2022, the US and Japan reached an agreement on tariffs to allow imports of up to 1.25 million metric tons of steel to enter the US duty-free. Additional shipments are subject to tariffs. The US and UK reached an agreement in March 2022 for 500,000 tons of duty-free steel imports per year. A similar deal with the EU allows 4.3 million tons to enter the US market duty-free, annually.
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