Prospects for the Valve Industry

1、Industry consolidation through mergers and acquisitions is driving higher market concentration

Disorderly competition within the industry has made it increasingly difficult for weaker water supply and drainage valve manufacturers to survive. At the same time, it has highlighted the competitive advantages of a select few enterprises that possess advanced technologies, strong R&D and innovation capabilities, comprehensive system solutions, and high-quality products. These leading companies are leveraging their integrated strengths to carry out resource integration within the sector—even acquiring smaller, weaker firms—thereby accelerating the pace of industry consolidation. As a result, market resources are shifting toward and concentrating in these stronger enterprises. Such mergers and restructurings can also address issues such as low operational efficiency, excessive market competition, and overcapacity in low-end products, ultimately enhancing industrial concentration and the overall competitiveness of the sector.

2、Environmental and sustainability requirements for valves will continue to rise

Most water supply and drainage valves are used in municipal networks for residential and industrial water applications. The quality, performance, and environmental compatibility of these valves directly affect people’s daily lives and health. As living standards improve, residents are paying increasing attention to drinking water quality. In 2012, China issued the Technical Code for Urban Water Supply and Drainage, which mandates strict and effective monitoring of water quality from the pipeline terminal to end users. This regulation has raised the bar for water infrastructure construction, requiring manufacturers to enhance product performance in areas such as quality, corrosion resistance, environmental friendliness, and energy efficiency. Enterprises with strong capabilities and robust R&D resources are well-positioned to adopt new product technologies and advanced manufacturing processes. In contrast, companies that focus solely on basic manufacturing without core technologies or proprietary processes will face developmental bottlenecks and risk being phased out by the market.

3、Significant growth potential in future markets

The rapid pace of urbanization and industrial development in China has continuously expanded the downstream application markets for water supply and drainage valves. First, rising urbanization levels have increased demand for municipal water supply and drainage systems, spurring both upgrades and new construction of urban water networks and driving rapid growth in the valve market. Second, the Chinese government has significantly increased investment in water conservancy infrastructure in recent years, ushering in a new wave of large-scale hydraulic projects that create substantial demand for valves. Third, growing public awareness of environmental protection—coupled with national policies favoring energy conservation and environmental sustainability—has triggered a period of rapid expansion in China’s wastewater treatment sector. Rising investments in wastewater treatment will further broaden the demand for water supply and drainage valves.

4、Growing demand for comprehensive system solutions from valve manufacturers

Two major application areas—long-distance water transfer projects and municipal water supply systems—are placing ever-higher demands on valve suppliers’ ability to provide integrated system solutions and diverse product portfolios. Procurement for these projects typically occurs through tender processes. Long-distance water transfer tenders emphasize a supplier’s capability to comprehensively address technical challenges such as water hammer and negative pressure that arise during pipeline operation. This requires valve companies to offer holistic problem-solving expertise and products capable of resolving a wide array of engineering issues encountered in such projects. Meanwhile, municipal water supply tenders prioritize suppliers with the capacity to produce a full range of valve types, enabling one-stop procurement.

Consequently, valve enterprises that combine strong system integration capabilities with the ability to manufacture a complete series of valve products will achieve significant growth in these two key sectors.

Driven by China’s national economic development needs and continuous technological advancement, demand is rising for high-parameter valves tailored to large-scale engineering projects. Currently, imported valves in China are primarily used in critical positions within key national projects and are typically high-value, technologically advanced products featuring high performance parameters, novel materials, and complex manufacturing requirements. As domestic manufacturing capabilities and technical standards continue to improve, China’s water supply and drainage valves are steadily evolving toward higher technology content, enhanced performance parameters, superior corrosion resistance, and longer service life. Going forward, the overall level of China’s valve industry will rise substantially, the localization rate of high-performance valves will keep increasing, and large-scale valve exports will become an inevitable trend.