When we prepared the forecast for this product line for 2019, we focused on power construction spending, the project environment, the regulation environment, and expected industrial consumption and still we missed by over 20%! Perhaps this is optimism on our part with regard to expectations of gas-fueled power generation. It just doesn’t seem to kick-off the way we would expect it to. Chalk that up to the lack of a clear energy policy and then add to that the influence of imported heat exchangers, shown in the chart below plotted against heat-based power generation, and we end up with much lower shipments than we had forecast. Keep in mind, however, that there are wind power incentives in place that expire at the end of 2020 which pushed construction in that direction. This is having an influence on our forecast for 2020 as well. One more point of note, the highlighted circle in the chart shows a spike in heat exchanger imports after the S232. While the cause is speculation, if tube prices increase due to a S232 tariffs, domestically built heat exchangers get more expensive which may lead to higher imports.
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