United States demand for large diameter pipe is projected to rise 6.2 percent annually through 2016 to 197 million feet. Growth will benefit from the repair and replacement of wastewater infrastructure, as many pipe projects, which were put on hold during the 2006-2011 period due to state and municipal budget concerns, move forward.
Additionally, the need to expand oil and gas transmission lines, especially near shale plays and other unconventional wells, will spur growth. Furthermore, improvement in manufacturing activity will boost pipe demand in processing applications. These and other trends are presented in Large Diameter Pipe, a new study from The Freedonia Group Inc., a Cleveland-based industry market research firm.
Sewers, which include both storm and sanitary sewers, will continue to be the leading market for large diameter pipe through 2016, accounting for one half of total demand. Gains in large diameter storm sewer pipe will come in large part from the U.S. population migrating toward the South and West regions of the country. Additionally, Environmental Protection Agency (EPA) mandates will provide opportunities for growth, as regulations regarding combined sewer overflows have become more stringent. As a result, many locales will be required to replace combined storm/sanitary sewer systems. The drainage market will experience the most robust growth in large diameter pipe demand through the forecast period, benefiting significantly from a rebound in building construction. By 2016, oil and gas will be the only major market for large diameter pipe that will have a significantly higher level of demand than 2006 levels.
Steel and high density polyethylene (HDPE) were the two leading large diameter pipe materials in 2011, each accounting for 31 percent of total demand. Opportunities in the oil and gas industry will spur growth for steel through 2016, as it is the preferred material in both line pipe and oil country tubular goods (OCTG) applications. HDPE will post above average gains as it continues to replace other materials in many applications. For example, corrugated HDPE will continue to replace concrete pipe in many drainage applications, benefiting from its ease of installation and light weight. Concrete will post the most rapid growth through 2016, as the material continues to benefit from its established position in most water markets and its unmatched performance advantages in the largest diameter uses.