DI pipes market outlook
The global ductile iron pipe market is worth around $8Bn and is predicted to grow at a 6% CAGR by 2030. Indian DI pipe market is expected to grow at a much higher CAGR of 13 – 15% due to huge investment by the govt in water infrastructure projects. In the next few years, DI pipes will also account for 1/4th of the pipe market share. This is because of the high reliability and long lifespan DI pipes offer.
Ductile Iron Pipes market forecast from 2022 to 2030
Increased penetration of ductile iron pipes has been reported throughout due to need to supply of piped water to the entire population, especially in the developing economies.
Ductile iron pipes are not suitable for standard pipe connections but have a wide range of uses in public infrastructure. These include potable water distribution, irrigation, sewage and wastewater transportation among others. As a result of this analysis, it appears that market growth is proportionately dependent on government investment in water infrastructure.
As the market has experienced low investor confidence due to the pandemic it also slowed the fast-moving ship of investments in Q2 and Q3 of FY2020. However, the same has picked up in subsequent years. Growing iron pipe applications, together with major market trends, are likely to drive the market for ductile iron pipes at a strong CAGR of close to 6% globally and 13% in India between 2022 and 2030.
Opportunities for DI pipe Manufacturers
As developing nations like India are growing at an impressive rate, the growing number of smart cities and developmental projects are raising the demand for networks of pipelines and eventually DI pipes. Also, the increasing pressure for advanced sanitation and economic progress is leading global governments to start wastewater and water management projects in their countries.
Rising awareness regarding safe potable water, improving wastewater management systems, and scientific advancement are some of the reasons that predict a significant rise in DI demand. In some countries, the strict rules and regulations for wastewater management and agricultural systems also contribute to the demand hike.
With our government increasing infrastructural projects the demand for DI pipes is also increasing, thus providing numerous growth opportunities for ductile pipe suppliers.
Indian DI pipe market and foreign manufacturers
Penetrating the DI pipe market in India is nearly impossible, as India has an 80% market share in South Asia according to FY2022. The market is dominated by key Indian players not just in India but throughout South Asia. One of these leading companies is TATA Metaliks.
India has a set of rules in terms of mandatory BIS certification when it comes to the import of DI pipes from foreign manufacturers. Furthermore, the government of India procures DI pipes from regional manufacturers to strengthen our economy. These are two major hurdles for foreign manufacturers/exporters when it comes to penetrating our Indian market.
How are Indian policies raising the demand for DI pipes?
Every government around the world is taking steps to meet the ever-increasing demand for water. As the developing nations are urbanizing rapidly, it has increased the demand for infrastructural services such as electricity, transport, roads, sanitation and water supply. The increased migration rate toward urban areas has led to the need for more wastewater pipelines.
One of the most growing concerns for governments throughout the world is unsafe sanitation which is growing at an alarming rate due to the increased global population. Half of the world’s population (around 4.5 Bn) still defecates in the open or utilizes unhygienic/dangerous sanitary facilities and services.
To tackle this situation governments across the globe are taking major steps to improve water quality, and currently, the only viable option (cheap, sustainable, corrosion-free, over 50 years expected lifetime) to impact the masses is DI pipes. This is one of the reasons why DI pipe demand is predicted to grow significantly over the next 10 years.
Pandemic Impact on DI pipe business
Due to the pandemic, DI pipes sales fell drastically in the second and third quarters of 2020. The market recovered in the fourth quarter with a significant spike, but still, the primary downfall was due to trade restrictions.
Since then the DI pipe market is growing, even though the first two quarters were a slump for the market the pandemic only had a minimal impact on the DI pipe business.
Like everything else, as the demand increases the price increases, there is an increased demand for urbanization and due to the advantages of DI pipes, they are higher in demand. Price increase is also due to increasing price of raw materials, especially coking coal.
The majority of companies have focused on product launches and expanding their manufacturing units in developing regions. Strategies include innovation, collaborations with key players, partnerships, strategic alliances, and the strengthening of regional and global distribution networks.
Similarly, we at Tata Metaliks are planning to double our production capacity of ductile iron pipes. We also plan to increase the percentage contribution of the ductile iron pipes segment from 56% to 70% in our business revenue.