HVAC Linset Market

The global HVAC Linset market size is estimated to be USD 9.2 billion in 2023 and projected to reach USD 13.4 billion in 2028, at a CAGR of 7.9%. HVAC Linsets are essential conduits for refrigerants in heating, ventilation, and air conditioning systems. Low carbon or copper-based, they ensure seamless transport even at low temperatures. Rapid growth is fueled by escalating air conditioner demand, surging construction, and urbanization, particularly in Asia Pacific, making them vital components in global cooling solutions.

Opportunities in the HVAC Linset Market

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Recession impact

Recessions can cause companies to postpone investments in research and development, as well as capital expenditures. This can slow down the pace of innovation and technological advancements in the field of HVAC Linsets. Companies may focus more on cost-cutting measures and short-term survival strategies rather than long-term investments. The residential HVAC Linset market may encounter a more substantial recessionary impact compared to its commercial counterpart. Consumer spending limitations might result in reduced residential demand, while the commercial sphere could display greater resistance.

HVAC Linset Market Dynamics

Driver: Urbanization and increase in residential construction

One of the key drivers propelling the HVAC demand on a global level is urbanization. The escalating pace of global urbanization, as projected by the United Nations, foresees an urban population of 6.7 billion by 2050. With urban areas expanding and housing demands soaring, the construction sector experiences heightened activity. This, in turn, amplifies the need for robust heating, ventilation, and air conditioning systems to ensure comfortable living conditions. HVAC Linsets, pivotal components within these systems, enable the efficient flow of refrigerants. The concurrent progress of urbanization and residential construction underscores the escalating requirement for effective HVAC solutions, thereby fueling the demand for Linsets.

Restrain: Local cooling solutions

In addition to the widely prevalent mass-manufactured AC units that are commonly adopted globally, a diverse range of localized cooling solutions is gaining prominence. This variety of alternatives could potentially pose a threat to the continued growth of traditional air conditioning units such as the innovative EcoCooler technology, is emerging. The EcoCooler is used to tackle the stifling summer heat in rural Bangladesh, which makes use of plastic bottles having holes drilled into them. The wider part of the bottle catches the wind and funnels it into the building. The change in air pressure that occurs when the air travels from the wider part of the bottle through the bottleneck has a cooling effect. Without requiring any electricity and using easily accessible materials, the device has the potential to lower indoor temperatures by 5°C. This presents itself as an economical alternative to the conventionally used ACs, thereby posing a threat to the growth of the HVAC systems as well as line set markets.

Opportunity: Growing income to propel the demand for HVAC systems

The increasing income levels of corporate employees, notably in emerging economies like India, Indonesia, and China, provide a growth avenue for HVAC systems, including air conditioners. The convergence of climate factors and improved income is projected to stimulate the adoption of air conditioning units. For instance, according to EIU forecasts, in China, real personal disposable income per head will grow at 7.2% per year, on average between 2018 and 2030, indicating the probable demand for luxury products such as split ACs. Additionally, the rise in the middle-class population of the APAC region to 3.5 billion people by 2030 would also create growth opportunities for HVAC systems in the future. The income growth also indirectly increases cooling demand by stimulating the development of modern retail stores and hypermarkets.

These factors are expected to create growth opportunities for the HVAC systems in the residential as well as commercial sectors, thereby enhancing the demand for HVAC Linset in the developing regions.

Challenge: Adoption of new refrigerants

As global efforts intensify to mitigate emissions, sectors including HVAC, refrigeration, automotive, aviation, leather, oil, and food industries strive to curb global warming gases. Despite this, refrigerant-based cooling methods remain a significant contributor. A substantial portion of cooling needs worldwide relies on refrigerants across various sectors like residential, industrial, and commercial HVAC. The refrigerants used in cooling equipment such as HVAC systems are regulated under the Montreal Protocol as well as the Kigali Amendment (December 2016). The Kigali Amendment to the Montreal Protocol recognized the connection between maintaining and/or improving the energy efficiency of RAC equipment with refrigerant transition under the protocol. Under the provisions of the Montreal Protocol on Substances that Deplete the Ozone Layer, the Chlorofluorocarbons (CFCs) were phased out globally since 2010. Hydrochlorofluorocarbons (HCFCs), selected for their lower ozone depletion impact compared to chlorofluorocarbons (CFCs), have been employed as interim replacements and are now undergoing a phased shift to be succeeded by hydrofluorocarbons (HFCs). However, both HCFCs and HFCs are extremely powerful global-warming gases. According to EIU, the HFCs have become the fastest-growing category of greenhouse gas and are far more potent than CO2, as measured by their global-warming potential (GWP) metric. Thus, the phasing out of the HFC and HCFC refrigerants and the introduction of more environment-friendly refrigerants pose a challenge for line set manufacturers, primarily the copper-based line set manufacturers. The copper-based line sets were commonly used with HCFC refrigerants. The main challenge for HVAC Linset manufacturers would be to explore more options in the raw materials used for the manufacturing of line sets to develop such materials which can accommodate the evolving refrigerants in the RAC and commercial HVAC systems.

HVAC Linset Market: Ecosystem

Low carbon is the second-fastest growing material type in the HVAC Linset market during the forecast period.

Low carbon is the second-fastest growing material type in the HVAC Linset market between 2023 to 2028, owing to its exceptional suitability for transporting refrigerants at temperatures as low as 50o F. Its controlled carbon composition (0.04%-0.30%) ensures resilience under high pressure and minimizes leak risks. This growth is further propelled by robust construction activity, the presence of major retail chains, and a strong HVAC system provider network, particularly in North America and Southeast Asia.

The commercial segment is estimated to be the fastest growing end use industry in the HVAC Linset market during the forecast period.

By end-use industry, Commercial segment is the fastest growing end-use industry during the forecast period. The commercial sector's growth in the HVAC Linset market is propelled by soaring demand for cooling solutions in diverse areas like offices, hospitality, supermarkets, banks, and data centers. Utilizing low carbon steel-based Linsets, this sector's substantial building area, extensive free space, and numerous connections drive high volumes. Notably, according to Japan Refrigeration and Air Conditioning Industry Association (JRAJA), commercial air conditioner demand is set to surge, particularly in North America, China, and other key regions, solidifying its position as the fastest-growing market.

The residential is the second fastest growing end use industry in the HVAC Linset market during the forecast period.

The residential segment is the second fastest growing in the HVAC Linset market due to surging global population and escalating air conditioner demand. Factors like heat islands, increased cooling degree days, and robust residential construction, notably in India, China, and Indonesia, drive HVAC system needs and copper-based Linset markets. Initiatives to address housing shortages, particularly in economically weaker sections, further propel this growth. The rise of smart homes also contributes, augmenting the demand for split air conditioners.

Based on region, Asia Pacific is projected to grow fastest in the HVAC Linset market during the forecast period.

Asia Pacific is projected to be the fastest-growing region in terms of value between 2023-2028. This is attributed to Asia Pacific's pivotal role as the epicenter of HVAC Linset market growth. The region's robust infrastructural upgrades, urbanization, and cost-effective manufacturing drive heightened demand for HVAC systems. Notably, China's industrial prowess and India's climatic conditions, coupled with the early adoption of advanced systems like VRF in countries such as Japan and South Korea, solidify Asia Pacific's position as the HVAC Linset market's fastest-growing segment.

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Source: Secondary Research, Primary Interviews, and MarketsandMarkets Analysis

Key Market Players

Daikin (Japan), Halcor (Greece), Hydro (Norway), KME SE (Germany), Mueller Streamline Co. (US) and Cerro Flow Products LLC (US). These players have established a strong foothold in the market by adopting strategies, such expansions, joint ventures, and merger & acquisitions.

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Scope of the Report

The study categorizes the HVAC Linset market based on material, implementation, end-use industry, and region.

By Material:

• Copper
• Low carbon
• Others

By Implementation:

• New Construction
•  Retrofit

By End-use Industry

• Residential
•  Commercial
• Industrial

By Region:

• North America
• Asia Pacific
• Europe
• Middle East & Africa
• South America

Recent Developments

• In November 2022, Daikin Industries, Ltd. has decided to establish a new residential air conditioner factory at the Greenland International Industrial Center near Jakarta, Republic of Indonesia. This decision reflects the company's response to the escalating demand for air conditioners in the Indonesian market.
• In December 2022, Hydro has reached an agreement to acquire Hueck, a provider of aluminium systems and extruded profiles.
• In July 2019, Feinrohren S.p.A. has continued to expand its operations and in 2019, the company inaugurated a state-of-the-art production plant in Brescia, Italy. This advanced facility utilizes the best production technologies available to manufacture high-quality copper tubes.
• In November 2022, the establishment of DiversiTech Europe has been announced through a merger involving several entities. These include Artiplastic of Milan, Castel Engineering of Belgium, and Rodigas of Padua, Italy, alongside the existing DiversiTech/Pump House business in the United Kingdom. This strategic merger will result in the creation of a unified European manufacturer and supplier, catering to the parts and accessories segment of the HVACR industry.

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