Demand for carbon fiber will grow as downstream production expands and federal funding rises
Los Angeles, CA (PRWEB) January 16, 2013
Carbon fiber is a composite material that is strong, extremely lightweight and can be molded to take on a permanent shape. End-users include downstream manufacturers, such as aircraft manufacturers, automobile manufacturers, bicycle manufacturers, wind turbine manufacturers and sporting goods manufacturers. Similar to other manufacturing industries, demand for the Carbon Fiber and Graphene Manufacturing industry has been volatile during the five years to 2013. “When the recession hit in late 2008 and carried on through 2009, demand declined for downstream customers as consumers reduced purchases in light of falling disposable income,” says IBISWorld industry analyst Radia Amari. “This decline hindered revenue growth for carbon fiber manufacturers. However, as the economy began to recover and consumer disposable income increased, demand from end-users like aircraft and automobile manufacturers began to grow, in turn boosting demand for carbon fiber.” Over the five years to 2013, revenue is expected to grow at an annualized rate of 2.5% to $2.1 billion. With the economy continuing to grow, revenue is anticipated to increase 8.2% in 2013 alone.
In addition to shifts in demand, the Carbon Fiber and Graphene Manufacturing industry endured high raw-material costs, which will remain constant in 2013. In light of this factor, industry firms raised selling prices to offset feedstock costs. “Together with rising demand for exports, these higher selling prices are expected to increase industry profit in 2013,” adds Amari.
Concentration in the industry is high, due to its capital intensive nature, the high level of technical expertise required to manufacture carbon fiber and the large-scale nature of the majority of end-users of carbon fiber. Indeed, the industry's primary domestic market – commercial aviation and aerospace – is also very concentrated; large aerospace manufacturers prefer to deal with large carbon fiber manufacturers that have the capacity to meet their demand. Market share concentration is expected to increase over the next five years as the industry's largest players, including major companies Hexcel Corporation, Cytec Industries and Zoltek Companies, continue to expand their operations to meet global demand.
In the five years to 2018, industry revenue is forecast to increase. Downstream manufacturing industries will increasingly demand carbon fiber as production expands and the trend toward creating stronger, yet lighter and more fuel-efficient products grows. Demand from the federal government for industry products will also rise over the next five years as its budget grows. The federal government uses carbon fiber in the production of military aircraft and equipment; it also invests significantly in carbon fiber and graphene research. For example, the Oak Ridge National Laboratory received a $35.0-million grant from the US Department of Energy to build and operate the Carbon Fiber Technology Facility in Tennessee. The grant will support the manufacture of carbon fiber at a lower cost. As a result of this rising demand and funding, more companies will likely enter the industry. For more information, visit IBISWorld’s Carbon Fiber and Graphene Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures graphene and other advanced carbon-based materials. The main products of this industry include graphene, carbon fiber and carbon nanotubes, which have excellent strength-to-weight ratios and electrical conductivity. Because of these properties, the products are used in automotive and aerospace design and can potentially be used in energy and information technology.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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