Market evolution: Thermal processing equipment (CN 841989) — 2015–2025

Introduction

This report examines the evolution of EU trade in CN 841989 — a residual code within heading 8419 covering thermal processing equipment not elsewhere specified, including cooling towers, vacuum-vapour deposition plant, and a wide range of industrial machinery for heating, cooling, sterilising, evaporating, and related processes. Excluded from this code are domestic appliances, furnaces and ovens (heading 8514), and the more narrowly defined sub-categories of heading 8419 (heat-exchange units, distilling plant, machinery for liquefying gases, etc.).

Over the 2015–2025 period, the EU consolidated its position as a major net exporter in this product category. Total extra-EU exports grew from EUR 1.67 billion to EUR 2.62 billion (+56.7 %), while imports more than doubled from EUR 363 million to EUR 784 million (+115.9 %). EU industrial output of thermal processing equipment also rose strongly, with production value increasing by 55.8 % to reach EUR 2.70 billion. Three overarching dynamics shaped this decade: a structural shift towards higher-value equipment that lifted unit prices, a dramatic geopolitical reorientation of trade flows — most notably the near-total collapse of exports to Russia and the surge toward the Americas — and an intensification of EU trade openness that underscores the sector's deep integration into global supply chains.

1. From Volume to Value: The EU's Price-Led Export Expansion

1.1 EU exports grew in value nearly six times faster than in quantity

Between 2015 and 2025, EU extra-EU exports of CN 841989 rose by 56.7 % in value but only 9.8 % in quantity (from 81,178 t to 89,122 t). This divergence points to a steep rise in average unit export values, which climbed from EUR 20,551/t to EUR 29,342/t (+42.8 %). The EU thus sold broadly similar volumes of thermal processing equipment at significantly higher prices, reflecting a move up the value chain towards more complex, technologically advanced systems.

1.2 The general thermal-processing sub-product dominated all flows

The product segment breakdown confirms that sub-code 84198998 ("thermal processing machinery, n.e.s.") accounts for the vast majority of both trade flows. In 2025, it represented EUR 2.36 billion of exports (90.3 % of the total) and EUR 729 million of imports (93.1 %). Its export unit value rose from EUR 21,468/t to EUR 29,660/t (+38.2 %), mirroring the aggregate trend. Cooling towers (84198910) remained a niche segment with relatively stable values, while vacuum-vapour deposition plant (84198930) — a high-technology product with unit values consistently between EUR 35,000/t and EUR 79,000/t — saw its export value halve from EUR 169 million to EUR 92 million, suggesting either declining competitiveness or the relocation of deposition activities outside the EU.

1.3 Import prices converged toward export prices as volumes surged

On the import side, unit values rose more moderately (+20.7 %, from EUR 23,800/t to EUR 28,735/t), but volumes grew by 78.7 %. Import prices started the period above export prices but by 2025 had converged to nearly the same level (EUR 28,735/t vs. EUR 29,342/t). This convergence — combined with the much faster growth of import volumes — may indicate that non-EU suppliers are increasingly competing in the same quality segments as EU producers, particularly in the general thermal-processing sub-category (84198998), whose import unit value rose from EUR 24,678/t to EUR 29,273/t.

2. Geopolitical Realignment: Sanctions, Diversification, and the Americas Pivot

2.1 The collapse of the Russian market was the decade's most dramatic trade shock

The most striking structural change visible in EU export destinations was the near-total disappearance of the Russian Federation as a customer. EU exports to Russia stood at EUR 185.6 million in 2015 and appear to have peaked at EUR 665.5 million before crashing to just EUR 2.0 million in 2025 (−98.9 %). This collapse — driven by EU sanctions imposed following Russia's full-scale invasion of Ukraine in February 2022 — represents a loss of a once-major market. Russia went from being the second-largest extra-EU export destination to a negligible one. The volatility coefficient for this flow was very high (0.92), reflecting the extreme amplitude of the boom-and-bust cycle.

2.2 The United States consolidated its position as the leading but volatile export destination

With Russia's exit, the United States became by far the EU's largest single export market for thermal processing equipment. Exports to the US grew from EUR 261.8 million to EUR 615.0 million (+134.9 %), with a peak at EUR 1,243.6 million. However, this flow is also one of the most volatile (coefficient of variation 0.58), and a significant price shock was detected in 2022, when unit export prices to the US jumped by 46.5 % (abnormality score 37.9). Given the US accounted for 27.8 % of total EU export value, this price shock had substantial systemic impact.

Mexico emerged as a second major growth story in the Americas, with EU exports surging from EUR 36.7 million to EUR 235.8 million (+541.7 %). By 2025, Mexico had become the third-largest extra-EU destination, likely reflecting nearshoring trends and the expansion of industrial capacity in North America.

2.3 Asian import sources grew fastest, diversifying EU supply away from traditional partners

On the import side, the fastest-growing suppliers were Asian economies. Imports from China rose from EUR 43.1 million to EUR 155.1 million (+259.6 %), while those from India grew from EUR 8.6 million to EUR 23.0 million (+166.8 %). Most strikingly, imports from Malaysia surged from EUR 2.7 million to EUR 41.6 million (+1,427.2 %), although this flow exhibited extreme volatility (CV of 1.74), with a peak at EUR 190.7 million suggesting episodic large shipments rather than a steady trade relationship. Traditional suppliers such as Switzerland (EUR 109.7 M → EUR 146.2 M, +33.3 %) and the United States (EUR 94.3 M → EUR 143.0 M, +51.6 %) grew more moderately.

The import concentration index (HHI by value) declined from 1,895 to 1,282 (−32.3 %), confirming that EU import sourcing became meaningfully more diversified over the decade. In 2015, the import market was moderately concentrated (Switzerland and the US together accounted for the bulk of inflows); by 2025, a broader set of suppliers — including several Asian economies — had gained significant shares.

3. Industrial Competitiveness, Specialisation, and Rising Trade Openness

3.1 EU production surged, led by Germany, Italy, and Belgium

EU industrial production of thermal processing equipment expanded strongly over the decade: production value rose from EUR 1.73 billion to EUR 2.70 billion (+55.8 %), while the number of items produced grew from 881,907 to 2,776,120 (+214.8 %). The much faster growth in item counts than in value suggests that part of the output expansion came from smaller or lower-unit-value equipment.

Among EU member states, Germany remained the dominant exporter, accounting for EUR 969.8 million in 2025 (+16.0 % from 2015), but its share of EU exports appears to have eroded as other members grew faster. Italy saw exports more than double from EUR 283.0 million to EUR 664.2 million (+134.7 %), and Belgium recorded the most dramatic growth, from EUR 62.6 million to EUR 211.6 million (+237.9 %). France was the only major exporter to contract, declining from EUR 87.2 million to EUR 72.6 million (−16.7 %).

RCA analysis for 2025 identifies Sweden (RCA 1.88), Germany (1.77), Romania (1.46), Austria (1.44), and Italy (1.41) as the most specialised EU producers in this product, while Ireland, Malta, and Luxembourg show no meaningful specialisation.

3.2 Export destination concentration increased, reflecting dependence on fewer large markets

In contrast to import sourcing, the export concentration index (HHI by value) rose from 622 to 875 (+40.7 %). This increase is partly an artefact of Russia's collapse: in 2015, exports were spread across several large markets (US, Russia, China), but by 2025 the US alone absorbed a far larger share of total export value. The peak HHI reached 1,956 in an intermediate year — a level indicating high concentration — coinciding with the period when the US import price shock was detected. This growing concentration on a small number of destinations, particularly the US, represents a structural vulnerability for EU exporters.

3.3 Trade intensity and export propensity both reached record levels, signalling deep global integration

The EU's trade intensity for CN 841989 nearly doubled over the period, rising from 59.9 % to 109.1 %, while export propensity more than doubled from 51.1 % to 111.7 %. An export propensity above 100 % implies that extra-EU exports now exceed the EU's own production value — a situation that can arise when re-exports, intra-EU redistribution, or inventory drawdowns amplify the export figure relative to current-year production. In any case, these figures confirm that the EU's thermal processing equipment sector is deeply export-oriented, with more than its entire output equivalent shipped to non-EU markets in 2025.

The net import reliance remained strongly negative throughout the period (from −41.2 % to −478.3 %), confirming that the EU is a major structural net exporter. The growing absolute value of this indicator reflects the widening gap between exports and imports relative to domestic production.

Conclusion

Over 2015–2025, the EU's trade in thermal processing equipment (CN 841989) underwent a profound transformation. The sector remained a strong net exporter, but the character of that export performance shifted: value growth far outpaced volume growth, reflecting a move toward higher-value-added equipment and rising global demand for advanced thermal processing solutions. EU industrial production kept pace, expanding by over 55 % in value.

The geopolitical landscape was reshaped most forcefully by the near-elimination of Russian trade following EU sanctions in 2022, which removed a market worth over EUR 600 million at its peak. This loss was more than compensated by surging demand from the United States and Mexico, though the growing concentration of EU exports on the US market introduces new vulnerability. On the import side, Asian suppliers — especially China, India, and Malaysia — gained ground rapidly, diversifying EU sourcing but also increasing competitive pressure.

Price shocks — most notably the 46.5 % unit-value jump in exports to the US in 2022 — highlight the sensitivity of this sector to demand surges and supply constraints. Looking ahead, the EU's strong specialisation base (led by Germany, Italy, Sweden, Austria, and Romania), combined with rising trade openness, positions the sector well for continued global engagement, provided that export destination concentration is managed and supply-chain diversification continues.