This has significant impact on suppliers of stainless steel products with manufacturing outside the region. A new trading group in Asia includes Chinese financing for plants throughout the region. The plant suppliers include a number of large Chinse companies. The Trans-Pacific Partnership (TPP), which has now been rechristened the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) includes the Regional Comprehensive Economic Partnership (RCEP) – a free trade deal involving the ten members of ASEAN plus its six dialogue partners. If it succeeds, RCEP will become the world’s largest trading bloc, accounting for 3.4 billion people with a total Gross Domestic Product (GDP) of $49.5 trillion.
China has more than 40 percent of the existing coal fired boiler fleet. It has 80 percent of all the coal fired power plants less than 20 years old.1 Most of the super critical boilers and the most recent ultra-super critical designs are also in the region. These are designs which are utilizing the latest high temperature and pressure resistant stainless steel materials. Coal fired power will remain the largest stainless steel purchasing segment in the world power industry over the next five years. Most of the stainless purchases in RCEP power plants will be for coal fired generation.2 Outside of the RCEP the two most active constructors of coal-fired power plants are Turkey and Pakistan. Due to the China-Pakistan Economic Corridor plan and billions of dollars of Chinese funding for seventeen coal-fired power plants, Pakistan is nominally part of this larger endeavor. China and Turkey have strengthened relationships and China is investing in Turkish power plants. So China is involved in all the regions with coal-fired boiler construction activity. RCEP will be the major purchaser of power plant stainless steel over the next five years. Environmental upgrades have been a good source of stainless steel business. For example a limestone scrubbing system for a coal fired plant requires an investment of more than $1 million just for nickel-based stainless alloys which provide the crevice corrosion protection. The addition of 200,000 MW of FGD systems in the U.S. spread out over three decades resulted in billions of dollars of revenue for stainless steel component companies.3 China has now installed over 900,000 MW of FGD systems. Other countries in RCEP will need another 400,000 MW of new and retrofit systems. India is presently retrofitting more than 50,000 MW of FGD. Power plant stainless products are subject to abrasion temperature fluctuations and corrosion. As a result annual expenditures including replacement parts, and service amount to more than 10 percent of the initial investment. This means that if the market is expanding at 5 percent per year then the existing market is two times greater than the new plant market.
International component suppliers may have difficulty selling stainless products for the new RCEP plants through Chinese plant suppliers but they have a good opportunity to supply replacement, parts and service as part of a whole IIoT and remote O&M program. There is presently a potential market in China due to an initial decision to use polymer linings for scrubbers. There have been corrosion issues and the need for replacement and repair.4 A number of the plant owners are large. NTPC in India will have more coal fired plants than any operator in the U.S. ever had. The same is true of government owned utilities in other RCEP countries. Japanese, European and U.S. power plant designers and operators can utilize their expertise to operate plants in RCEP. MHPS has created a remote monitoring center in the Philippines for 24/7 support of coal fired power plants in RCEP. This structure combining large end users and third-party operators gives the international supplier an opportunity The coal-fired power plant stainless steel component market is too large to be ignored by international suppliers. They will need to find a way to participate in the RCEP sector or find themselves displaced by new leaders.
(1) Utility Tracking System published by the McIlvaine Company
(2) Fossil and Nuclear World Power Generation published by the McIlvaine Company
(3) FGD World Markets published by the McIlvaine Company
(4) IIoT and Remote O&M published by the McIlvaine Company