MRC Global October 2017 InSight

Valves, Automation, Measurement & Instrumentation

Overall, we have seen an upturn in the North American markets during the first half of 2017, and it appears as though improvements will continue somewhat for the balance of the year. However, not all market segments have seen the same level of improvement, so, while some manufacturers are busy, others are looking for more work.

The demand for valves, automation, measurement and instrumentation (VAMI) products in the US onshore upstream market continues to show positive signs in the first half of 2017, especially in the Permian Basin and the Marcellus, where rig counts continue to improve. Our inventory levels are in line with the market demand, and MRC Global continues to place new stock orders with manufacturers to support the increased upstream market activity. Overall, the US offshore market and the international upstream market are still somewhat sluggish due, in many cases, to higher lifting costs.

The demand for valves and automation products in much of the North American midstream, pipeline and gas utility markets continues to remain strong and, in some cases, is increasing as a result of numerous major infrastructure projects that continue to move forward. Ongoing and newly approved pipeline activity, both for new projects and mandated integrity work, continues to provide steady demand for valves and actuators going into these applications. We expect this trend will continue over the next 24 months. As a result, we have increased our inventory position on pipeline ball valves up to 42”, slab and expanding gate valves to 24”, as well as double block and bleed plug valves used in most terminals. Many of these valves are equipped with actuators and controls in one of MRC Global’s valve and engineering centers (VEC).

The North American midstream gathering market has shown positive signs of improvement in line with the uptick in the upstream market, and MRC Global is well-positioned with inventory to meet the increased demand. The international midstream market is not as active on new pipeline activity.

The demand for valves used in the downstream market has been steady and lead times are expected to remain relatively long. Strong US refining turnaround schedules and planned maintenance projects continue, which we anticipate will lead to a slight increase in demand. Chemical sector activity should continue to increase in line with major project activity.

Refinery and chemical customers continue to introduce higher pressures, increased temperatures and more corrosive and erosive conditions in their daily operations. Oftentimes these elevated service conditions require specialty alloy valves that can handle added stress. In some cases, triple offset butterfly valves and metal seated ball valves continue to gain ground over traditional gate valves, especially where quarter turn on/off and positive shut off (zero leakage) is preferred. Two added benefits of this change are a smaller valve footprint and less expensive pneumatic actuators to automate these valves.

To support our customers with these operational challenges, MRC Global has expanded our downstream product offering to include refinery coker valves, HF acid valves, metal seated ball valves, Orbit rising stem ball valves, double block and bleed plug valves, double and triple offset butterfly valves, as well as chrome-moly and high nickel alloy valves.

Our exclusive distribution agreement in North America with Cameron, a Schlumberger company, for measurement products, along with the addition of measurement and instrumentation specialists to our procurement and technical teams, has allowed MRC Global to better fulfill our customers’ needs from local inventories. Key measurement product groups include turbine meters, turbine meter totalizers, Floco® meters and CLIF MOCK samplers. Demand from the market for these products remains strong, and, as with most products, we anticipate this to increase in line with improving oil prices.