Heat Exchanger Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Heat Exchanger Category Overview

The heat exchanger category is expected to grow at a CAGR of 5.1% from 2023 to 2030. The increasing demand for energy-efficient solutions is expected to drive the category growth. In 2021, the International Energy Agency (IEA) predicted that energy-efficient heat exchanger technology will aid in reducing world energy demand by up to 40% by 2040. Energy-efficient solutions are becoming a crucial element in a variety of industries due to growing energy prices and climate change concerns. Industries including chemical processing, oil and gas, HVAC, food and beverage, power generation, etc. depend heavily on heat exchangers to increase energy efficiency and to lower energy consumption.

The government initiatives contributing towards energy conservation are anticipated to drive the category share. Governments across the globe have introduced policies and incentives to encourage industries to adopt energy-efficient technologies and decrease greenhouse gases emissions. For instance, by 2030, the European Union aims to reduce greenhouse gas emissions by approximately 55% to 60%. One of the regulations that the EU introduced to accomplish this goal and promote energy efficiency and renewable energy is the Energy Performance of Buildings Directive (EPBD) introduced in 2002 and implemented in January 2006. This directive encourages to modify an existing building to increase energy efficiency. Therefore, employing heat exchangers in HVAC systems for buildings will play a crucial role in achieving these goals.

The Europe and Asia-Pacific regions dominate the market share in this category. In 2022, these regions collectively accounted for 45% - 55% of the market share. In the Asia-Pacific region, China and India hold a significant portion owing to rising investment in various sectors such as chemical, petrochemical, and HVAC systems.

Companies are increasing their research and development efforts, to incorporate cutting-edge technology advancement into the development of new manufacturing techniques, materials, and designs to reduce operating costs and carbon footprint. Companies are adopting and incorporating improved technology such as tube inserts in heat exchangers. These technological advancements will accelerate the market growth of this category and increase energy efficiency, total life cycle cost, durability, and compactness of heat exchangers.     

The three main cost components in this category are raw material costs, manufacturing costs as well as design and engineering costs. Other costs involved are inspection and testing, direct and indirect overhead costs, etc. Copper, aluminum and stainless steel are the major raw materials used in the production of heat exchangers and any fluctuation in their availability & price will have an impact on the end product. The manufacturing cost is affected by elements such as core and frame materials, interface tolerances, coatings, and other requirements. The type of core and frame material i.e., tubes, fin, and/or sheet metal significantly varies the cost of heat exchangers. The core and frame material price differences are dependent on the type of raw materials required to produce the heat exchanger and the amount of time spent on manufacturing the part. For instance, copper tube-fin heat exchangers are the cheapest to manufacture whereas stainless-steel tube-fin heat exchangers are more expensive due to its weight, higher punching time and necessity to do welding in comparison to copper. Other drivers like interface tolerance specifications and coatings contribute to the manufacturing cost variation.

Countries such as China, India, and the U.S. are the most preferred sourcing destinations for this category due to China’s growing industrialization and population. For instance, China is the largest exporter of heat exchangers which accounted for a share of 100,772 shipments followed by India with 92,447 and Germany with 57,093 shipments till June 2023. Further, China is gradually reducing its reliance on coal for household heating to enhance its focus on decarbonization in the cooling and heating industry by improving air quality and switching to heat pumps. Selecting a full-service supplier i.e., a supplier equipped with the full range of heat exchangers required by companies is considered to be an important sourcing practice in this category. Other best sourcing practices include identifying the right material for the heat exchanger. Full-service suppliers incorporate OEM expertise, proprietary software, and datasets to identify the ideal number of plates, amounts of heat transfer, or pressure drop required for any heat exchanger. It aids in improving planned downtime efficiency and heat transfer performance.

Heat Exchanger Procurement Intelligence Report Scope