A significant amount of sensible and latent heat can be recovered at low temperatures from the flue gas of process heating equipment. However, the condensation of acids and water vapor makes the flue gas a highly-corrosive environment, which is a challenge for condensing heat exchangers. Corrosion-resistant materials are usually expensive and/or have relatively low thermal conductivities. Hence, it is essential to characterize the role of thermal conductivity of heat exchanger material in the performance of condensing heat exchangers. In the present study, a new analytical model is proposed and validated against available experimental data to predict the thermal performance of a tube-bank heat and water recovery unit. Our study indicates a threshold for tube thermal conductivity (~0.75 W m −1 K −1 ), which is a point where further increase does not significantly improve the condensation efficiency. This relatively low value of thermal conductivity, compared to commonly-used materials, e.g., ~10–15 W m −1 K −1 for stainless steel, unlocks the potential of using materials such as natural graphite, plastics, polymers, and ceramics (with thermally conductive additives) for applications in condensing heat exchangers and heat/water recovery in industry.