Market evolution: Heat treatment equipment (CN 84198998) — 2015–2025

Introduction

This report examines the evolution of EU trade in heat treatment equipment classified under CN 84198998 — a residual subheading covering machinery, plant, or laboratory equipment for the treatment of materials by a process involving a change of temperature, not elsewhere specified. This includes industrial dryers, evaporators, cooling equipment, sterilisers, and similar process machinery used across sectors such as food processing, pharmaceuticals, chemicals, and energy.

Over the period 2015–2025, EU trade in this product category underwent a pronounced expansion. Total export value grew by 74.7% (from €1.35 billion to €2.36 billion), while imports more than doubled (+123.2%, from €327 million to €729 million). Throughout the entire period, the EU maintained a large and growing trade surplus, which widened from €1.02 billion to €1.63 billion. This underlying strength, however, masks a series of dramatic shifts in partner geography, market concentration, and supply chain structure — driven in part by geopolitical disruptions and post-pandemic demand dynamics.

1. A Sustained Export Surplus Driven by Value Growth

The EU consolidated its position as a net exporter throughout the decade

The EU has consistently been a major net exporter of heat treatment equipment. The net import reliance was negative throughout — meaning exports exceeded imports in every year — and deepened from −38.9% in 2015 to −48.7% in 2025, indicating that the EU's export surplus grew faster than its domestic absorption. The trade balance ranged from a minimum of €1.02 billion (2015) to a maximum of €2.02 billion, before settling at €1.63 billion in 2025.

Price appreciation outpaced volume growth on the export side

Export value grew nearly three times faster than export quantity. While export volume rose by 26.5% (from 62,943 tonnes to 79,627 tonnes), export value surged by 74.7%. This gap is explained by a significant increase in unit export prices, which rose by 38.2% — from €21,468 per tonne in 2015 to €29,660 per tonne in 2025. The price peak was reached at €31,331/tonne, suggesting that the EU's export basket shifted toward higher-value, more specialised equipment over the decade.

Source: General Overview

Imports grew even faster, though from a much lower base

Import growth substantially outpaced export growth in percentage terms (+123.2% vs. +74.7%). Import volume nearly doubled (+88.2%), while import prices rose more modestly (+18.6%). The peak import year saw €1.02 billion in inbound shipments, indicating rising demand from non-EU suppliers — particularly from Asia. Despite this faster growth, imports remained far smaller than exports in absolute terms, reinforcing the EU's structural surplus.

2. Dramatic Geographic Reorientation of Trade Flows

The collapse of exports to Russia stands out as the single most striking structural shift

Among the EU's top export partners, the Russian Federation experienced the most dramatic reversal. EU exports to Russia fell from €152 million in 2015 to just €2.0 million in 2025 — a decline of 98.7%. The maximum year recorded €657 million in exports, indicating that Russia was once a major destination. This collapse is consistent with the progressive tightening of EU sanctions regimes following 2014 and their sharp escalation after February 2022, which restricted exports of industrial machinery to Russia.

Mexico emerged as the fastest-growing export market

In contrast, EU exports to Mexico surged by 655.8%, rising from €30 million to €228 million. Mexico became the EU's second-largest extra-EU export market by 2025, overtaking several traditional partners. This growth may reflect nearshoring trends in North American manufacturing, increased investment in Mexican industrial capacity, and the preferential terms of the EU–Mexico trade agreement. The United States remained the dominant export destination, growing by 186.4% to reach €590 million — nearly a quarter of total EU extra-EU exports.

Source: Top partners by value

Imports diversified significantly, with Asian suppliers gaining ground

On the import side, supply sources shifted markedly toward Asia. China's share of EU imports grew from €39 million to €144 million (+268.1%), while imports from Malaysia exploded from €2.7 million to €41.3 million (+1,419.7%) — the fastest growth rate among all partners. India also saw rapid growth (+404.7%, from €4.1M to €20.5M). Traditional European suppliers such as Switzerland remained important (+33.4% to €144M) but grew more slowly. This trend is reflected in the import concentration index (HHI), which fell from 2,129 to 1,320 (−38.0%), indicating that imports became substantially less concentrated on a few suppliers.

Germany dominated both intra-EU trade flows

Within the EU, Germany was the leading exporter by a wide margin, accounting for €906 million in extra-EU exports in 2025 (+30.9% vs. 2015). Italy grew most dynamically among major exporters, surging by 175% to €607 million. Belgium showed the largest proportional growth (+402.5% to €182M), and Spain rose by 236% to €113M. On the import side, Germany was also the largest importer (€202M), followed by the Netherlands (€149M, +196%) and France (€61M).

3. Structural Deepening Accompanied by Rising Volatility

The EU's trade intensity and export orientation roughly doubled

The trade intensity (exports + imports as a share of production) nearly doubled, rising from 64.2% to 127.4%. Even more striking, export propensity (exports as a share of production) grew from 54.6% to 137.2% (+151.2%). An export propensity above 100% implies that export volumes exceeded domestically measured production — a pattern that may reflect re-exports, inventory drawdowns, or measurement timing differences. Either way, it underscores how deeply integrated EU manufacturers have become in global supply chains for this equipment.

EU production grew rapidly in volume but more moderately in value

Domestic production volumes expanded dramatically — from 678,307 items to 2,730,000 items (+302.5%) — while production value grew more moderately, from €1.32 billion to €2.0 billion (+51.2%). This divergence suggests that a significant portion of the volume increase came from lower-unit-value products, while the higher-value segment saw more modest output expansion. The export value growth (+74.7%) outpacing production value growth (+51.2%) is consistent with the EU increasingly orienting production toward export markets.

Export market concentration increased even as import sources diversified

While import concentration declined (HHI from 2,129 to 1,320), export concentration moved in the opposite direction — rising from 601 to 952 (+58.5%). This reflects the growing dominance of the United States and Mexico as export destinations, combined with the collapse of the Russian market. The EU's export base thus became more geographically concentrated despite overall value growth, potentially increasing vulnerability to demand shocks in a few key markets.

Supply chain volatility was pronounced for several partners

The coefficient of variation — a measure of year-to-year trade volatility — was exceptionally high for some partners. On the import side, Malaysia (CV = 1.74), Japan (1.00), and Thailand (0.91) showed the most erratic flows, likely reflecting shifting sourcing decisions and pandemic-era supply disruptions. On the export side, Thailand (1.83), South Korea (1.03), and Russia (0.96) were the most volatile, with the Russian figure driven by the sanctions-related collapse.

Notable price shocks were detected in several markets

The shock analysis identified three significant price shock events in EU exports:

• Switzerland, 2017: An abnormal price spike (abnormality score of 399) with a 39.5% unit price shift, affecting 5.4% of export value.
• Saudi Arabia, 2021: A 162.1% price shift (abnormality 51.0), likely linked to a small-volume, high-value project delivery.
• United States, 2022: A 53.7% price increase (abnormality 39.7), impacting 28.7% of total export value — the most consequential shock in the dataset, potentially reflecting post-pandemic demand surges and inflationary pressures in the US industrial sector.

Conclusion

Over the 2015–2025 period, the EU's heat treatment equipment sector (CN 84198998) demonstrated robust growth and a deepening international orientation. The trade surplus widened to €1.63 billion, driven by strong export performance — particularly to the United States, Mexico, and Switzerland — and rising unit values that suggest a shift toward higher-end products.

The most consequential structural change was the near-total loss of the Russian market for EU exporters, a shift clearly attributable to sanctions. This loss was more than compensated by explosive growth in other markets, notably Mexico (+655.8%) and the United States (+186.4%). On the import side, Asian suppliers — especially China, Malaysia, and India — gained substantial ground, diversifying the EU's supply base but also raising questions about long-term industrial competitiveness.

Looking ahead, the combination of rising export concentration (fewer, larger markets) and persistent supply-chain volatility in key Asian import partners presents both opportunities and risks. The EU's strong production base and export specialisation — led by Germany, Italy, and increasingly Belgium and Spain — position it well, but the sector's growing dependence on a small number of large export markets warrants monitoring.