Global carbon fiber demand in 2013 was 46,500 tons and was valued at over USD 1.7 billion. The market is expected to grow at an estimated CAGR of over 10% over the forecast period. Increasing demand for lightweight and high-strength components from various end-use industries is expected to drive the global carbon fiber market over the next seven years.
The market has observed a steady growth since global economic recession in 2009. Carbon fiber demand grew up from 26,500 tons in 2009 to 46,500 tons in 2013 growing at an average growth rate of around 15% over the forecast period. This demand corresponded to USD 1.7 billion in 2013.
This huge growth has led to a dramatic capacity expansion by leading manufacturers to cope up with increasing demand. However, lower economic growth rates have adversely affected carbon fiber demand. Lower demand growth than expected has created a huge surplus production capacity. In 2013, excess capacity of over 40% was reported for carbon fiber based on polyacrylonitrile.
Growing concern for automotive and fuel efficiency along with stringent regulations regarding vehicular pollution has increased the need for lightweight vehicles. Carbon fiber and its composites are primarily used to reduce vehicular curb weight without compromising with the strength.
Increasing carbon fiber composites demand from aerospace industry is also expected to fuel market growth over the forecast period. In aerospace industry, material weight and strength plays a crucial role. Need for lightweight aircrafts from defense as well as commercial sectors to increase fuel efficiency and overall performance.
High raw material conversion cost leads to higher prices for carbon fibers. In spite of extraordinary benefits offered by carbon fiber, its high cost has restrained its penetration into various application segments. High prices have so far limited their use to high-performance applications such as jet fighters, spacecraft, race cars, racing yachts, exotic sports cars, and notably, the latest Airbus and Boeing airliners.
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Automotive segment is also becoming increasingly important with demand increasing rapidly over the forecast period. This segment accounted for over 10% of the global demand in 2013. Growing demand for lightweight high-performance materials from automotive industry to improve fuel efficiency in the U.S. and Europe is expected to remain a key driving factor for this segment over the forecast period.
The market is segmented on the basis of raw material as polyacrylonitrile (PAN)-based and pitch-based. PAN-based fibers dominated the market on account of their superior properties. PAN-based material accounted for over 85% of total volume in 2013.
North America dominated the global carbon fiber market and it is expected to retain its dominance over the forecast period. Stringent environmental regulations to reduce reliance on fuel by improving efficiency have prompted demand for high-performance lightweight materials in the region. North America is followed by Europe. Europe is expected to be the fastest growing market over the forecast period.
Carbon fiber industry is witnessing overcapacity as a result of dramatic capacity expansion in the recent years. The global carbon fiber market is concentrated in the hands of ten leading fiber manufacturers, who controlled over 91% of the production capacity in 2013.
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