NR2137

NEWS RELEASE                                                                                        SEPTEMBER 2015

Thermal Oxidizer Market to Grow From 4 to 18 Percent Depending on Oil Prices and the Chinese Economy

The market for thermal and catalytic oxidizers will grow by over 18 percent from 2015 to 2019 at oil prices of $80/barrel during the period and Chinese economic growth of 7 percent per annum.  At $40/barrel and 2 percent economic growth in China, the oxidizer market growth will only be 4 percent.  These are the latest forecasts in N007 Thermal Catalytic World Air Pollution Markets published by the McIlvaine Company. (www.mcilvainecompany.com)

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There are a number of variables which will determine growth for the oxidizer market. New insights are continually generated which justify changes in the forecasts.  The Iran nuclear agreement is just one example. The plunging economy in China and the drop in oil prices to $40/barrel are the most significant.  

Lower oil prices will result in less oil and gas drilling activity.  However, this sector in 2015 represents just 15 percent of the total market. The lower prices could actually benefit the transportation segment which includes oxidizers for automobile paint finishing. The direct impact of oil prices is therefore only a maximum 2 percent drop in the market.

However, lower oil prices will result from lower Chinese economic growth. So we can assess market forecast variations based on this China parameter and assume there is an oil price correlation.

China represents 19 percent of the total world oxidizer market, therefore, changes in the forecasts for this country will significantly impact the total market.  At 7 percent growth rate in the economy, the Chinese oxidizer market is projected to grow by 38 percent through 2019. At a 2 percent economic growth rate in China, its oxidizer purchases would remain at their 2015 level. In addition, oxidizer revenues in chemicals and certain other industries benefiting from the Chinese imports would also not be as robust.  As a result, the world oxidizer market in 2019 would only be 5 percent higher than in 2015.  At a 5 percent economic growth rate in China the oxidizer market will grow by 12 percent in the next four years. When oil prices and the Chinese economy scenarios are combined the oxidizer growth rate to 2019 varies from 4 percent to 18 percent.

Some of these developments are more predictable than others.  The low oil prices lead to lower extraction activity which eventually leads to shortages and higher prices.  On the other hand, the Chinese economy, wars, oil spills and earthquakes cannot be easily predicted.  As a result, there will be the need for continuous changes in the forecasts to take into account the surprises.

For more information on N007 Thermal Catalytic World Air Pollution Markets, click on: http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/105-n007