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World heating market valued at US$ 31.1 billion in 2007July 2008

In 2007, the total world heating market was valued at US$ 31.1billion with many European heating markets in decline. In Germany and Italy, the boiler market shrunk dramatically. Germany suffered a decline of 37% in the domestic boiler market, with floor standing type experiencing the largest decrease. This is mainly because consumers were uncertain about which technologies to choose and are holding back expenditure on heating products. Also, in recent years conventional heating markets have experienced increasing competition from the rise of renewable technologies, especially heat pumps.

Domestic boilers
The UK continues to be the world domestic boiler market leader by volume with more than 1.7million units, and is expected to remain lead position for the foreseeable future. The UK is followed by South Korea in second place and Italy in third.

Germany showed a large decline in the domestic boiler market in 2007, where it experienced a drop of 37%, in which all boiler groups were affected, but in particular the floor standing types, which saw a reduction between 30-40%. A similar situation is also reflected in France, Italy and other European countries.

Wall-hung boilers dominate the European market with nearly 6.27 million units in 2007. The UK is the biggest condensing boiler market in the world, accounting for nearly half of the total world volume.

South Korea continues to be number one for oil/pressure jet non-condensing boilers; however the overall market is set to decrease gradually, with the UK experiencing the biggest decrease of 40.5% (CAGR).

Commercial boilers
In comparison to the rest of the heating segments analysed in the world study, the commercial boiler market holds a relatively small share, approximately 0.3%. Over the next few years the market will enjoy a steady albeit small growth of 3.1% (CAGR).

Germany, Italy, South Korea and the Czech Republic suffered the largest decreases. However 2007, was not quite as bad for the German commercial boiler market as it was for the domestic boiler market. Commercial boiler market share shrunk by around eight per cent, whilst the domestic boiler market experienced a 30% decrease. The decline mainly came from the pressure jet gas boiler segment.

With a total of 60, 000 oil boilers sold in 2007, Asia Pacific is the largest market for these types of boilers. The gas-fired market in the USA continues to see healthy growth each year. Premix gas fired boilers are the most common type representing around 35% of the US commercial boiler market. In Japan rapid growth is expected for premixes, but at the expense of atmospheric boilers.

Due to stricter government regulations on energy consumption, condensing boiler technology is in high demand in Europe, with 486,000 units sold in 2007. The Netherlands is the market leader in this segment accounting for 30% of the total European market share.

In almost all regions, boiler outputs of between 50-100kW experienced the highest level of sales in 2007, with the exception of Asia Pacific where the preferred output is in the 100-300kW ranges.

Water heating
Overall, electric storage water heaters are the leaders within the world heating market, accounting for nearly 39% of the global water heater market. Not surprisingly China is the market leader in the Asia Pacific region. The European market is led by France, which accounted for nearly 18% of the total European market segment, closely followed by Russia and Italy.

The electric instantaneous water heater market is the second largest segment and clearly dominated by Brazilian sales, representing about 81% of the total world market volume. The reason for the preference of electric boilers is because electricity is cheaper than gas in Brazil. Due to high electricity costs in Italy, electric instantaneous water heaters are deemed un-economic and consumers prefer the storage type, which are considered more energy efficient; therefore the electric water heating market is negligible in Italy.

The Japanese water heating market is among the largest in Asia, with China being the market leader. Gas storage technology is not popular in the market, as they are considered bulky and unsuitable for Japanese houses. The preferred option is for gas instantaneous heating as Japan holds around 85% of the Asia Pacific market for this type of water heating.

The Russian market has grown significantly in value. In 2007, the market was valued at nearly US$ 270.1 million, representing a 19% increase from the previous year. This has been mainly attributed to the need for back up supply in the district-heating network (which often shuts down for at least one month during the summer and does not provide for sanitary hot water outside the heating season), the huge replacement demand for outdated products, the growing availability of electric storage water heaters and unlike Western Europe, water heaters in Russia have not yet lost major share to wall hung combi boilers.

Sales of gas water heaters have been hampered by the growth in sales of combination boilers, which supply both space heating and hot water within the same product.

Glass lined steel is the most common material for electric storage water heaters in the global marketplace, representing 36.8% of the total market share and nearly 80% of the total European water heating market. Galvanised steel water heaters continue to dominate the Asia pacific region, but show signs of decline in the future.

Radiators and Underfloor Heating
The world market for radiators show signs of a steady growth with high increases for the "other steel" radiator segment. The Spanish market for radiators experienced a sharp fall of 17% from the previous year; the market is expected to continue its downward spiral, decreasing each year.

The global cast iron market decreased by around 15% in 2007 and will gradually fall over the next few years. Aluminium radiators are eroding the remaining market share held by cast iron radiators as these are considered to be quite heavy, old fashioned and complicated to handle and store.

Towel warmers remain a relatively new product but it is one of the fastest growing segments in the Russian market, with an estimated 25% increase in sales volume. Europe leads the market for towel rail radiators accounting for 87% of the world market.

Underfloor heating market is set for a steady increase in market volume between 2006-2011. The Italian market benefited from a nine per cent growth in 2007, with underfloor heatng becoming a very popular choice, in particular for new developments mainly in the residential sector. Water based underfloor heating systems are a popular choice in Italy due to the high electricity prices.

Supply Structure Seven major players dominate the European domestic boiler market, which include Bosch, Baxi, Vaillant, Viessmann, MTS Group, Riello and Ferroli. Often these firms have several brands under their umbrella and use them in individual countries.

Although the large domestic boiler manufacturers in the Asia Pacific region have a significant share of the world market, they are only strong in their home country, with the exception of Rinnai and Kiturami for non-condensing wall hung boilers. In Asia Pacific, mainly local manufacturers and distributors supply boilers. North American boiler manufacturers are also confined to their own region, finding it difficult for existing products to conform to European regulations.

The pressure jet market is dominated by the Koreans who are very strong market players in their home market, two major companies include Kiturami and Kyungdong. Bosch and De Dietrich Remeha dominate the wall hung cascade boiler market.

The main suppliers of steel panel radiators in the world market are Rettig, Caradon Stelrad and Vaillant. Rettig is the overall market leader. Fondital and Ferroli hold a large share of the overall aluminium radiator market. In Spain, the local manufacturers of aluminium radiators include Rayco, Roca and Ferroli. Chunfeng and Shanxi Qingxu Beilushu dominate the Asia Pacific region for cast iron radiators. Main suppliers of underfloor heating is Uponor, who have a large market share in the USA, but their brands are also evident in Europe, particularly Germany and Italy. Rehea also holds significant market share in Europe and the US. In the UK towel radiator market, the do-it-yourself chain B&Q is the clear market leader.

Instantaneous gas water heaters in China are mostly supplied by Vanward, Marco and Vantage. Rinnai and Noritz also have significant market share in the Asia Pacific region. The electric storage water heater market is led by the MTS Group, which have considerable market share in many of the countries, particularly in China, Italy, Russia and France. AO Smith is a major player in this market especially in the USA and China.

Statistical data in this article is quoted from the World Heating study, published in April 2008. Modular reports are available for Commercial Boilers, Water Heating, Domestic Boilers, Radiators & Underfloor Heating. For more information on this study please contact Tim Page at WMI.