Impact of Recycled Carbon Fibers and development of new production technologies on the Carbon Fiber Market

Carbon fiber was first discovered in the 1970’s when extensive research was happening to find alternative materials for metals. Initially, carbon fibers were not widely accepted due to its limited compression strength and high price. However, today, a lot of developments have been made on carbon fiber, and its use is extensive in various end-use industries such as aerospace & defense, automotive, sporting goods, wind energy, marine, civil engineering, pipe & tank, electrical & electronics, oil & gas, 3D printing, high-speed rail, hydrogen gas storage, and others. Carbon fiber is a long, thin strand of material made from carbon. The carbon content is more than 90% for standard modulus industrial grade and almost 100% for high modulus aerospace grade.  Carbon fiber is produced from raw materials such as PAN, pitch, rayon, or other organic fibers.

In the last five years, many new developments have taken place that has the potential to impact the price dynamics and demand & supply scenario of the carbon fiber market.

Disruptive technologies will shape the carbon fiber supply and demand scenario

Many new players are ready to enter the carbon fiber market with low-cost carbon fiber for industrial applications. This will impact the price and usage of carbon fibers in the near future. 4M Carbon Fiber Corporation (US) is ready to enter the market with low-cost carbon fiber in the next five years. It is working with the Oak Ridge National Laboratory (ORNL), RMX Technologies, LLC (RMX), and the University of Tennessee on a government-funded project to demonstrate the use of 4M’s atmospheric plasma oxidation with low-cost precursor to manufacture low-cost industrial grade carbon fiber. The project’s objective is to demonstrate that standard modulus carbon fiber can be made from textile grade PAN precursor using significantly less energy and less processing time. This will cut the manufacturing cost by about 50%. This technology is a new approach to the oxidation stage of carbon fiber production in which polymer materials are oxidized (or stabilized) before carbonization.

Similarly, LeMond Composites (Australia) and Daikin University (Australia) have signed a USD 44 million deal to produce low-cost carbon fiber. New technologies will revolutionize the use of carbon fiber across the world by making it more affordable to produce. These technologies will make carbon fiber technology more accessible to a wider range of industries such as transportation, renewable energy, infrastructure, or any industry that benefits from using lighter, stronger, safer materials.

Recycled carbon fiber will compensate for the shortfall of carbon fiber supply in the future
Recycled carbon fiber is not as strong and stiff as virgin carbon fiber. However, it has the potential to be used for various applications. Recycled carbon fiber has similar mechanical properties to the original fiber, usually retaining at least 90% of its tensile strength with no change in modulus. Recycled carbon fiber cost almost 50% less than virgin carbon fiber. A kilogram of recycled carbon fiber costs around USD 15/kg, whereas, the cost of virgin carbon fiber is around USD 24-30/kg. The use of recycled carbon fiber is increasing to mitigate any shortage in virgin carbon fiber supply. According to ELG Carbon Fiber, the waste accounts for approximately 30% of the production volumes. Carbon fiber recovered from waste can fill the supply gap, which will help in the growth of the overall carbon fiber market. Recycled carbon fiber also has reduced environmental impact compared to virgin carbon fiber. Government’s actions for minimizing landfill and disposal of carbon fiber waste are subjected to vast regulations and are costly. Owing to these regulations, carbon fiber waste is available at a low cost to carbon fiber recyclers.

Many companies have already adopted recycled carbon fiber in various applications. Airbus has set a target of recycling 95% of its carbon fiber waste by 2025. 5% of the recycled carbon fiber will be used back in the aerospace sector. There was a collaboration between BMW and SGL Carbon to recycle carbon fiber scrap from BMW i-series vehicles. Around10% of carbon fiber used in the BMW i-series vehicle is recycled carbon fiber. Currently, there are over a dozen companies manufacturing recycled carbon fiber such as ELG Carbon Fiber, CFK Valley Stade Recycling GmbH & Co. KG, Carbon Fiber Recycling Inc., and Karborek. With the new players entering the market and the expansion by the existing companies, the global supply of recycled fibers is expected to double in the next five years.

MarketsandMarkets™ View Point:

Manish Verma – Senior Analyst : Chemicals & Materials, at MarketsandMarkets™, shares his Point of View as mentioned below:

The new entrants in the carbon fiber market, such as 4M Carbon Fiber Corporation and LeMond Composites, are expected to gain a competitive edge over the existing large players in the carbon fiber market in terms of price and supply of carbon fibers for industrial applications. Low-cost carbon fiber will be supplied by the new players in the market in the near future. Recycled carbon fibers will also have a huge impact on the price and supply-demand dynamics of carbon fiber, especially in industrial applications.

The availability of low-cost industrial grade carbon fiber will reduce the dominance of the existing carbon fiber manufacturers for industrial applications. This will create huge competition in terms of price and create a huge demand from industrial applications such as automotive, hydrogen fuel cells, sporting goods, and wind energy. These factors will ultimately change the price and supply-demand dynamics of carbon fiber in the near future.

The development of new manufacturing technologies is expected to reduce the cost of carbon fiber significantly, which will open up numerous commercial markets. The carbon fiber market is worth USD 4.7 billion and is projected to register a CAGR of 10.6% through 2024 with the growing demand from automotive, rail cars, pressure vessels, infrastructure, wind energy, and other industries that require strong and lightweight materials. Increasing the use of strong, lightweight carbon fiber will improve the energy efficiency of cars, trucks, and aircraft without compromising safety. According to projections by JEC Conference in South Carolina in December 2017, more than 150 new carbon fiber lines will be required if there is no significant reduction in carbon fiber cost.  The demand for carbon fiber is likely to drastically increase with the reduction in the cost of carbon fiber.  

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