China Air Pollution Control was Discussed and Analyzed in Hot Topic Hour July 30

This two hour session included some good insights by companies with experience in China including Alstom, B&W, W.L Gore, Kimre, and others. The meeting started with facts showing continued health in the Chinese economy. U.S. exports to Asia excluding Japan have jumped 22 percent since January. Industrial production grew at the 30 percent rate in Asia in the second quarter. Asian GDP grew at a nine percent annual rate in the second quarter. China’s overseas investments will increase 13 percent from a record $52 billion last year. China’s GDP climbed 13 percent in 2007 and nine percent last year. Annual expansions of about eight percent are forecast from 2010 as the global economy grows at a weaker pace than before the financial crisis, curtailing export demand.

China will have a big impact on the world air pollution markets in the future. China is a major consumer of bags, catalyst, steel and other products related to air pollution control. This will raise prices for APC components and consumables in ROW in the short term. China has a big NO_x SCR program with more than 200,000 MW of SCR forecast to be in place in the next few years. This will push catalyst demand beyond present world capacity. The two domestic catalyst suppliers in China will have less than 20,000 m³/yr of capacity. So this will put pressure on pricing throughout the world.

The demand for all the components for new coal-fired power plants in China will slow as China adds only about 20,000 MW of new plants each year compared to a peak of 75,000 MW a few years ago. China already purchases more bags for bag filters than any other country. However, the industry to make roll goods and finished bags is growing rapidly in China.

China is a market to be pursued by ROW suppliers. ITT won an order for 325 knife gate valves for a big FGD project. Ershigs is pleased with its initial experience in China. Lantor and Hollingsworth and Vose now have Chinese plants. In general, the companies selling to China are pleased with the initial experience. China is receptive to new concepts. Marsulex recently sold its ammonium sulfate scrubbing system to a Chinese power plant.

Particulate control for cement plants is a very large market now.  The steel industry is another big market segment. Odor control scrubbers for wastewater plants are being supplied by offshore companies.

Over the longer term China will become a major supplier and exporter and tend to lower prices for components and consumables. Because this country will be the largest market it will ultimately have some of the most experienced suppliers. Some individual FGD licensees in China already have 30,000 to 40,000 MW of scrubbing systems contracted and/or operating.

China will compete and take international markets away from European, Japanese and U.S. companies. On the other hand, China can be part of the expansion strategy of international companies. B&W Beijing just sold 2 x 600 MW coal-fired power plants to Vietnam. Many international suppliers are using their Chinese manufacturing facilities to serve the international markets.

China is sensitive to the greenhouse gas issue and will have the largest wind turbine generating capacity in the world by 2010. But it will be very difficult to persuade China to cut back on emissions when their per capita emissions are only 20 percent of the US.

Greenhouse Gases in Tons/Yr/Per Capita in Selected Countries