NEWS RELEASE                                                                                        SEPTEMBER 2015

Cross-Flow Membrane Market to Grow By 15 To 20 Percent in the Next Four Years Depending On Oil Prices and the Chinese Economy

The market for cross-flow membrane systems and membrane modules will grow by over 20 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 world cross-flow growth will only be 15 percent.  These are the latest forecasts in N020 RO, UF, MF World Market published by the McIlvaine Company. (www.mcilvainecompany.com)

There are a number of variables which will determine the growth for the cross-flow systems and membrane 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 1 percent of the cross-flow market. Desalination represents nearly 30 percent of the market and will not be impacted by lower oil prices. In fact, lower oil prices result in lower raw material costs for membrane manufacturers.  The direct impact of oil prices is therefore negligible. However, lower oil prices will result from lower Chinese economic growth. So we can assess market forecast variations based on this parameter and assume there is an oil price correlation.

China represents 19 percent of the total world cross-flow 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 cross-flow market is projected to grow by 25 percent in 2019. At a 2 percent economic growth rate in China, its cross-flow revenues would remain at their 2015 level. In addition, world cross-flow revenues in mining and certain other industries benefiting from the Chinese imports would also not be as robust.  As a result, the world cross-flow market in 2019 would only be 15 percent higher than in 2015.  At a 5 percent economic growth rate in China, the world cross-flow membrane market will grow by 18 percent in the next four years.

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.

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