Due to the impact of the new crown epidemic, 2020 is a crisis year for the composite materials industry, as the epidemic has triggered cash flow and demand crises, supply chain disruptions and worker safety issues. Although 2020 is full of challenges, the prospects for 2021 seem to be brighter.
At the beginning of 2020, the US composites industry started quite well and showed signs of good growth similar to 2019. By the end of March, new orders were postponed or even cancelled. In the second quarter, especially in April and May, the epidemic had the greatest impact, leading to the most severe and violent economic contraction since the Great Depression. Over 20 million people were unemployed in the summer, and factories in all walks of life were also closed. The transportation, construction, and shipping industries have been hit hardest, resulting in a 20% reduction in U.S. fiberglass demand in the second quarter of 2020 compared to the first quarter of 2020.
However, the second half of 2020 will be the fastest recovery period for the economy and composite materials industry. Since July 2020, driven by the stimulus plan and the reopening of factories, demand in various end-use industries in the US composites industry has begun to grow, including the automotive, marine, and construction industries. Therefore, compared with the second quarter of 2020, the US glass fiber market increased by approximately 23% in the third quarter of 2020.
In the fourth quarter of 2020, the U.S. glass fiber market remained strong, with a November growth rate of approximately 5% compared to November 2019. By the end of 2020, the fiberglass market cannot fully recover from the pandemic and is expected to drop by about 6%, with demand dropping to 2.44 billion pounds, compared with 2.59 billion pounds in 2019. The impact of the coronavirus on the entire value chain is irregular. Automobiles, pipelines and storage tanks, aerospace and marine applications are showing a significant downward trend, while the wind energy, electrical and electronic, and construction industries still maintain a good development trend.
The wind power industry is a bright spot in 2020. Although it temporarily slowed down in March and April due to supply chain bottlenecks, cross-border transportation issues and government restrictions, the wind power industry still achieved double-digit growth. Overall, the market is growing because wind farm developers are eager to start construction in time before the expected expiration at the end of the year to qualify for production tax credits.
COVID-19 has forced executives to rethink the future of the composites industry. In certain market segments, excess capacity has exacerbated the slow recovery, such as the aerospace industry. Boeing CEO Dave Calhoun estimates that it will take two to three years for air travel to return to pre-COVID levels.
Consumers are also increasingly aware of sustainability, which has prompted industry participants to explore green materials, renewable energy and recycling technologies in the production of materials and composite parts. In addition, most departments are increasingly using digital technology to change work and labor.
With the help of the new stimulus plan approved in December last year and the coronavirus vaccine, Lucintel expects a good recovery in the US glass fiber industry in the first and second quarters of 2021. Favorable trends in automobiles, housing, pipelines and storage tanks, electrical and electronic products, consumer products, and the ocean will cause the glass fiber market to grow at a rate of 8% to 10% in 2021, reaching or exceeding the demand level in 2019.
Carbon fiber: all market segments have huge growth potential
Since 2010, the global carbon fiber market has grown from less than 40,000 tons to more than 100,000 tons in 2019. During this period, the growth of carbon fiber was steady and uninterrupted, with an annual growth rate of 10% to 12%.
But in 2020, with the COVID-19 pandemic, global carbon fiber has changed almost overnight. In 2020, the global demand for carbon fiber will total about 105,000 tons, an increase of only 1% over 2019. It is expected that in 2021, the growth rate will be only 1%.
The carbon fiber market is driven by the growth of applications in many fields, such as aerospace, wind energy, sporting goods, ships, automobiles, and pressure vessels. Before 2020, the growth rate of all these market segments and the growth rate of the entire industry are steadily increasing.
But with the border closure in early 2020, international air travel ceased, aircraft grounded, aircraft manufacturers drastically cut productivity, and the carbon fiber industry seemed to lose momentum in an instant. The application of carbon fiber in the aerospace industry accounts for more than 20% of the total industry and 40% of the industry value. The slowdown in the commercial aviation industry has severely affected the carbon fiber industry, and it may take several years to return to the level before the epidemic.
Although the aerospace news is depressing, not all of 2020 will be bad news. When people learned to work from home and vacation near home, some markets performed well. For example, in 2020, the demand for sporting goods jumped by 30% to 40%, and the installation of wind turbines continued to increase by 20% over the previous year as planned.
According to the end-use market, the carbon fiber application market segmentation in 2020 is roughly as follows:
Wind energy — 23%;
Automobile — 10%;
Composite materials for injection molding plastics and other short fiber applications — 8%;
Building and infrastructure—8%;
Other market segments—9%
As in the period before the epidemic, with the commissioning of new applications and projects, all market segments of carbon fiber have huge growth potential. Prior to the outbreak of the new crown epidemic, the potential long-term trend of carbon fiber’s attractiveness remained unchanged. The advantages of carbon fiber—stiffness, high strength-to-weight ratio, corrosion resistance, electrical conductivity, etc.—are still valid today. In order to achieve growth, carbon fiber and CFRP parts must have both technical and economic benefits.
Therefore, people have different views on the various industries and applications that drive the overall demand for carbon fiber. Some industries decline, while others will rise. Those areas that have shrunk, especially the aerospace industry, have caused the total volume of the carbon fiber industry to look relatively stable in 2020, and it is expected that there will only be a very moderate growth in 2021. However, the long-term outlook is more optimistic. In the next few years, it is reasonable to expect that the carbon fiber industry will once again resume strong year-on-year growth.
As for the production capacity of the carbon fiber industry, the global carbon fiber manufacturers’ total nameplate production capacity is approximately 160,000 tons, which is sufficient to meet current demand. Some manufacturers are planning to add new factories and capacity to meet the ever-increasing future demand. Finally, it must be kept in mind that carbon fiber is still in its early stages of development. The airplanes are manufactured by hand, and there are only one or two a day; other applications are slightly higher, but there is still no automation. In contrast, the mass production speed of automobiles exceeds one per minute. Today, carbon fiber is still mainly used for small batch applications, and “mass production” has not yet been achieved.
All in all, the new crown epidemic has brought a certain blow to the carbon fiber industry, but this is only temporary. Although many things have happened in this extraordinary year, the future of carbon fiber is still full of hope, and the development in the next few years will also be very interesting.
Construction and infrastructure: construction has been reduced, which may be a turning point for the industry
When people are talking about the main application areas of composite materials, the construction industry is often not at the top of the list, but it has been developing. The global construction economy is one of the largest construction economies in the world and one of the largest resource and energy consumption fields. It is also one of the largest sources of pollution. Together, these factors promote the overall demand for sustainable development. Which can play a role.
According to the “Global Construction Outlook” and the “2030 Global Construction” issued by the Oxford Economics, it is estimated that by 2030, the global construction industry output value will increase by 85% to reach 15.5 trillion US dollars, most of which will be concentrated in the United States and China And India. The McKinsey Global Institute reports that by 2025, 36 million new housing units will be needed in the 20 largest cities in the world.
Other studies in the construction industry show that 23% of air pollution, 40% of water pollution and 50% of landfill waste in the United States are caused by the construction industry. In addition, the US Green Building Council says that buildings and construction projects account for approximately 40% of global energy consumption each year.
The role of composite materials in construction is diverse, from window frames and wood reinforcement to composite steel bars and fiber-reinforced concrete. Regardless of the material used, the lightweight, design flexibility and durability advantages of composite materials can help speed up construction and improve the sustainability score of the building.
Take the Museum of the Future under construction in Dubai, United Arab Emirates (UAE) as an example. This 78-meter-high building has seven floors with a circular shell on top of the three-story podium. The façade of the ring consists of 1024 flame-retardant composite panels, each covered with stainless steel, has a unique 3D shape, and incorporates molded Arabic characters.
In Brooklyn, New York, USA, additive manufacturing composites helped speed up the construction of the 45-story One South First and the connected 10 Grand, which are located in Domino Park. These buildings consist of a complex concrete façade, requiring hundreds of concrete frames to be prefabricated through gates. Gate hired Additive Engineering Solutions (AES) to help make the mold used to shape the concrete frame. In part of the production, AES chose LNP Thermomp AM composite material, a high modulus, low warpage material, chopped carbon fiber reinforced ABS resin material provided by SABIC.
Due to the advent of the new crown epidemic, housing construction and public construction in 2021 will be contracted. The construction of most infrastructure and public buildings will be constrained by government entities’ budget balances, declining tax and fee revenues, and unbudgeted expenditures related to the pandemic. In the short term, only a few non-residential niche markets look promising. This includes refurbishing many types of existing facilities to accommodate requirements related to the coronavirus. In addition, more facilities are needed outside hospitals and nursing homes to provide medical care, screening, and testing. School construction may be some exceptions. As more families move, the demand for new and rebuilt or expanded schools will continue to grow.
The COVID-19 pandemic has increased the demand for alternatives to scarce skilled workers in the field. To a certain extent, composite materials and products can replace on-site manufacturing, or be installed faster by workers with less experience or lower skill levels. Even if the product itself is more expensive, the demand for composite materials will continue to grow.
Therefore, for contractors, 2021 may be a challenging year. But this may mark a turning point for composite manufacturers hoping to enter the construction market.
Post time: Jul-12-2021