Dynamics of the Composites Industry

20 May 2009

JEC has published a new worldwide market survey dealing with the evolution and the potential of the composite materials industry from 2008 to 2013..

“One of JEC’s missions is to inform about economic and technological developments and provide technical training for composite professionals by launching new publications”, explains Frédérique MUTEL, JEC President and CEO. In these changing times, industrialists have to consider new business growth to make their strategic choices. That’s what we help them to do with that new strategic study.”

Some of the key findings of the report are as follows

The composites industry is growing in volume in correlation with the increase of GDP by country. In developed countries, composites’ positions against competing materials (steel, aluminium, technical polymers...) are now stable (equilibrium based on an overall stable price difference) - except in Aeronautics, where composites are still expected to replace competing materials.

In emerging countries, the composites market is mainly driven by economic growth following a development curve (the more a country is economically developed, the bigger its composites market tends to be). Overall - with the exception of Aeronautics - the worldwide composites industry therefore evolves globally in line with its underlying application industries.

The global economy is currently undergoing a severe downturn in all regions and worldwide economic growth for 2009 is expected to be at around 0% worldwide (excluding inflation). This slowdown is forecast to end by international financial institutions - with nevertheless some uncertainty on when economic growth rates should go back up to structural levels (around 6% p.a. for emerging countries and around 1-2% for developed countries) - either in 2010 or in 2011.

In this global context, the composites market is expected to grow on average at 4% p.a. from 60 B€ (8.6 Mt) in 2008 to 80-85 B€ in 2013 (10 Mt). Overall, the share of BRIC [Brazil, Russia, India, China] countries is expected to grow from around 22% today to 29% in 2013 (China representing 23% of the worldwide market in 2013, India 3%, Brazil 3% and Russia less than 1%).

The main growth drivers for the worldwide composites market should be:

▪ The growth of the Asian market, especially in China (+8-9% p.a., 43% of the worldwide growth), with the main contribution in terms of industries coming from Building and Construction (equipment phase) - 67% of the growth - and Automotive (increase of local demand) - 45% of the growth for the Transportation market. According to Frédérique Mutel, “the fast development of composites market in Asia, typically in China and India, will keep driving the emergence of large players across the value chain of composites: Chinese leaders (e.g. Jushi, CPIC, Taishan) for fibreglass manufacturing, Indian and Chinese players on composites processing for the Wind Energy market (Suzlon in India, Goldwind and Sinovel in China), for the Automotive market (Xieno Automobile, Yahoa Dazhong Advanced Materials…), and in some years time for the Aeronautics market”.

▪ The growth of the Wind Energy market worldwide (+16% p.a.; 19% of the worldwide growth) driven by the combination of public regulation in favour of renewable energy (to reduce the global impact on environment) and of the possibility to exploit Wind farms that are economically viable,

▪ The continuing penetration of composites materials in Aeronautics, where lightening issues will drive the development of new commercial aircrafts with higher level of composites (from less than 10%, to 10-15% on average for commercial aircrafts).

In terms of processes, more automated processes should keep developing at the expense of manual processes, in particular in Asia, where today they remain underdeveloped compared to North America and Europe.

“By 2013, raw materials prices are expected to decrease for fibreglass and carbon fibres (driven by current overcapacity and expected adjustment by 2013) and are expected to increase for resins (driven by expected increase of oil prices back to 2008 levels at around 70-100$ per barrel)”, concludes Frédérique Mutel.

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