A global outlook at materials and markets for composites.
The future of the global composites market is bright. There is increased demand for lightweight materials across market segments for products as varied as large aerospace components and small consumer goods. Composites fit the bill.
The global composites end product market is expected to reach $113.2 billion by 2022, according to market research firm Lucintel. So what does that mean for composite manufacturers and their material suppliers? Industry experts weigh in on five specific areas in this year’s annual State of the Industry report.
The Glass Fiber Market
By Dr. Sanjay Mazumdar, CEO
Overall, the U.S. composites industry had a strong performance in 2017, despite disruption in some raw material supplies, shortages of shipping containers, longer shipping times and plant shutdowns in the Gulf Coast and Southeast due to Hurricanes Harvey and Irma. In the fourth quarter of 2017, impact from the hurricanes stabilized, with all segments showing positive results.
In the composites industry, glass fiber is the major reinforcing material. The U.S. glass fiber market grew by 4 percent in 2017 to reach 2.5 billion pounds in terms of volume and $2.1 billion in terms of value. The market is expected to reach 3.1 billion pounds by 2023 with a compound annual growth rate of 3.4 percent.
Transportation, construction, and pipe and tank are the three major segments for glass fiber, representing 69 percent of the total volume. Increasing housing starts, automotive production and positive growth in oil and gas activities, along with growth in water and wastewater infrastructure in U.S., are expected to drive the glass fiber market through 2023 and beyond.
In terms of supply and demand, the global glass fiber capacity was 11.2 billion pounds in 2017 and is currently running at 93 percent utilization. (See figure 1.) Lucintel predicts that the glass fiber plant capacity utilization will go down to approximately 91 percent in 2018 as glass fiber suppliers increase production capacity. For example, in 2018, Owens Corning plans to build additional capacity in France and India, Jushi and Johns Manville plan to add capacity in the U.S., Taishan is investing in India and Şişecam Group is installing a new plant in Turkey.
The glass fiber market is evolving as there are more and more applications emerging in various end markets. Purchasing decisions in most of the markets continue to be highly influenced by the price of GFRP components. To drive growth and competitive edge in the fiberglass market, the industry needs to focus on the following:
Price Reduction: The industry needs to look for ways to reduce the cost of composite parts as it competes with steel, aluminum and concrete. There are plenty of innovation opportunities available to reduce raw material cost, labor cost and energy cost in a composite part. For example, to compete in the price-sensitive $200 billion rebar market, an FRP rebar manufacturer has to come up with an innovative technology to make rebar using glass fiber and sand to reduce the cost of FRP rebar by almost 40 percent.
Innovative Manufacturing Technologies: Development of transformative manufacturing technologies with reduced cycle time and reduced cost are needed in the industry. There are plenty of opportunities for innovation in composites, as they offer flexibility in design, material selection, manufacturing and hybridization.
A Robust Supply Chain: The industry needs to invest in developing a global supply chain of raw materials, design, tooling and manufacturing for composites as there are increases in globalization in many industries such as automotive, wind energy, aerospace and electronics. For example, Ford makes vehicles globally and prefers to have the same supplier for a single component to meet its global production needs, thus achieving a global footprint in the supply chain is critical.
Better Simulation and Prediction Techniques: The marketplace needs to invest in developing better simulation software for composite parts manufacturing. In the steel industry, there are simulation software programs that can predict tolerance, warpage, quality and reliability of parts.
Investment in Repair and Recycling Technologies: The industry needs to solve OEM challenges regarding repair and recycling by developing cost-effective technologies and infrastructure.
In conclusion, there will be significant innovation opportunities in the composites industry in various nodes of the value chain. As the industry emerges as a mainstream supplier in numerous markets, there will be winners and losers. Lucintel expects many new and innovative vendors to arise and address market needs.
The Automotive Market
By Marc Benevento, Managing Director
Industrial Market Insight
Although 4 billion pounds of composite materials are sold into automotive applications annually, composites account for only about 1 percent of the average vehicle by weight. While optimism about the growth prospects of composites is warranted due to regulatory and technological drivers, barriers to adoption of composites remain and market conditions will create a challenging environment for industry suppliers over the next few years. Composites will win new applications, but will remain in a niche position within the market.
Like other materials, composites will be selected for use only when they offer superior value in terms of overall cost, weight and performance versus the competition. While numerous factors contribute to the adoption of composites in automotive applications, primary drivers include global fuel economy standards and enabling technologies. Conversely, barriers include a declining sales growth rate in light vehicles and competition from other materials.
In North America and elsewhere, allowable carbon dioxide emissions from light vehicles continue to decrease, requiring automakers to develop vehicles that are more fuel efficient. By 2025 EPA-required fuel economy will be 60 percent above the 2012 level for cars and 35 percent above the 2012 level for pickup trucks. OEMs are pursuing multiple paths to reach these aggressive targets, including the reduction of vehicle mass.
As a rule of thumb, a 10 percent reduction in vehicle mass yields a 7 percent increase in fuel economy. In addition, lighter vehicles require less power to accelerate, so they remain fun to drive when paired with smaller, fuel-sipping engines. As a result, OEMs are investing in lightweight materials to deliver efficient, yet exhilarating vehicles. Composites will play a role, the significance of which will be dictated by the value they deliver versus other materials, along with their ability to fit into the automotive infrastructure.
A longstanding challenge facing the composites industry has been compatibility with joining and painting processes that were developed for metals. However, the search for weight reduction has forced OEMs to get more creative with the use of conventional materials and to consider combinations of steel, aluminum and composites that would have been inconceivable not too long ago. The use of structural adhesives, both as a primary joining method and in concert with spot welding and riveting, has enabled a lot of this lightweight innovation.
Automotive suppliers have enjoyed consistent market growth since light vehicle sales in North America bottomed out at 10.4 million vehicles in 2009. Vehicle sales showed consistent year-over-year growth from 2010 to 2015, with annual rates of change well above gross domestic product growth rates. In 2015, vehicle sales topped 17 million units, which has been the sustainable level of demand in non-recessionary periods. Although sales remained strong in 2016 and 2017, staying above the 17 million unit mark, year-over-year growth is flat. (See figure 2.) With little headspace for the market to grow in the next few years, suppliers looking for growth will have to fight for market share with both direct and indirect competitors.
Suppliers to the automotive industry know the competition for business is fierce. Steel has long been the material of choice for OEMs, and the incumbent enjoys the advantage of an established manufacturing infrastructure and a low-cost position. The steel industry has continued to improve, raising the bar for materials hoping to displace it.
Despite these efforts, aluminum has gained significant market share due to its familiar processing, compatibility with automotive paint systems and “next best” cost position when compared to steel. Suppliers of competing materials, including composites, will need to demonstrate they have superior solutions to steel and aluminum in terms of weight, performance and cost in order to win applications. This includes demonstrating the ability to meet automotive cycle times, cost and end-of-life concerns.
Overall, the automotive market is a challenging environment, but composites are well positioned to gain share in the coming years. Composites offer a compelling combination of cost, weight and performance, particularly when designs are created that take full advantage of composite material and processing techniques. Suppliers that diligently validate their value proposition before investing human and financial capital will get the best returns in this competitive market.
The Carbon Fiber Market
By Daniel Pichler, Managing Director
The market for carbon fiber continues its robust growth. In 2017, the global demand for carbon fiber was approximately 75,000 metric tons. Aerospace, wind blade and automotive applications each made up about one-fifth of the market, with the remainder comprising sporting goods, compounding for injection molded plastics, pressure vessels, construction and infrastructure reinforcement, tooling, marine, oil and gas, and other smaller end use applications. In recent years, demand for carbon fiber has grown by 10 to 15 percent per year, and this same growth rate is expected to continue for the coming years.
Industry capacity for carbon fiber production is around 95,000 metric tons on an effective net capacity basis (the actual maximum that can be produced) after taking into account knock-down effects from product mix on the 125,000 metric tons of total industry nameplate capacity (the rated capacity). Of the 20 producers of carbon fiber in the world, the top six account for about 80 to 85 percent of industry production and sales. The 10 newest producers – many of them in China – account for 12 to 15 percent of world’s nameplate capacity, but less than 5 percent of world’s production and sales, so they have some catching up to do. With demand for carbon fiber expected to break through 85,000 to 90,000 metric tons in 2018-2019, demand and capacity will come into balance once again and additional capacity will be needed or tightness of capacity will prevail.
The acceptance of CFRP in any application depends on both the technical and economic benefits they can deliver. In most applications, the technical benefits of carbon fiber include low weight from the high strength-to-weight performance of the material. For example, a steel automobile body-in-white (a car with the sheet metal components welded together) weighs approximately 400 kilograms. The body could weigh 75 percent less if constructed from CFRP – a great benefit in reducing fuel consumption of conventional vehicles or extending the driving range of battery-powered electric vehicles.
The economic challenge for adoption of CFRP in mass market applications, such as in everyday automobiles produced by the millions, has yet to be solved. Not only must the carbon fiber itself come down in cost, but so must the composite part, too. Fortunately, the solution is becoming clear: volume production.
High-volume serial production allows the use of new high-speed processes – such as resin transfer molding, compression molding, injection molding, wet molding and others – all developed for making CFRP parts and aided by robotic material handling. The end result is CFRP parts made in single minutes rather than several minutes to hours as in the past. Volume production scenarios can solve the “chicken or the egg” causality dilemma that CFRP parts have faced until now: Volume applications are needed to demonstrate mass production and low unit costs, while lower unit costs are needed for mass market high-volume adoption. (See figure 3.)
In addition, the indirect benefits of using carbon fiber to lower weight of a specific automotive component or assembly must be fully exploited throughout the vehicle. With a lower body weight, a car requires less suspension and a smaller engine, wheels and tires. The entire engineering of a car may need to be changed to fully take advantage of all that CFRP offers.
In conclusion, the market for carbon fiber and carbon fiber composites is growing robustly. Demand is catching up to available capacity. Developments in both thermoset resin systems and thermoplastics are helping CFRPs to be more largely adopted. In new mass market applications, such as automobiles, the right applications used in the right ways can bring about volume production. And volume production will result in lower costs.
The Aerospace Market
By Jens Hinrichsen, Engineering Manager
With crucial support from universities and research institutes, the aerospace industry has undergone a transformation from a metal-driven world to a composite-dominated new standard.
Over the past 15 years, we have witnessed a dramatic increase of composite applications in two new aircraft programs: Boeing’s 787 Dreamliner and the Airbus A350 XWB. Material suppliers are challenged by growing demand as production ramp-up takes place. A supply chain analysis conducted by Oak Ridge National Laboratory (Report ORNL/SR-2016/100) estimates a stunning 290 percent increase in aerospace demand for carbon fiber between 2012 and 2020.
OEMs and their component suppliers grow their manufacturing capabilities at the same steep gradient. While automation plays an increasingly important role, equipment suppliers and tool manufacturers are equally challenged with regard to throughput and required improvements: The increase of lay-up volume per hour is the overarching theme as this performance indicator translates into earnings – or losses – on the shop floor.
Future growth of composite applications and associated demand of supply hinges on the success of cost reduction initiatives. For the commercial aerospace industry, the challenge is centered on carbon fiber materials and processes (M&P), as well as enablers for cost reduction, namely automation and digitalization.
During the last decade, a revolution took place: Boeing, followed by Airbus, gave preference to composites over metallic and/or hybrid technologies, setting a new standard for the choice of material for large primary structures and resulting in more than 50 percent composite material content for both the Dreamliner and A350 XWB. Digesting the major consequences from such a revolution can be challenging.
One major effect was that OEMs and their suppliers experienced significantly higher recurring and non-recurring costs compared with projections based on early design-to-cost studies. The reasons are manifold, but are all linked to a lack of composite-specific know-how in the fields of design for manufacture, tool design, large-scale automation and real-time quality inspection that occurs during ply lay-up.
The aerospace industry is currently in a consolidation phase, engaging in an improvement process dedicated to deployment of enablers for both cost reduction and quality improvement. It focuses on the following:
- Material handling quality optimization to adjust tackiness in the environment, reduce fuzziness, etc.
- Machine optimization: Ease of access for cleaning
- Stabilization of manufacturing environmental parameters, such as temperature and humidity
- Automation, including automated tape laying (ATL) and automated fiber placement (AFP)
- Simultaneous quality inspection, documentation and flaw assessment via digitalization
Changes to the approved design for an aircraft in production are normally ruled out because of excessive cost. However, lessons learned about the interdependency between aircraft designs and manufacturing are very valuable when it comes to M&P selections for a new aircraft program. The “middle-of-market” wide-body program at Boeing – and successors for the B737 and Airbus A320 – are candidates that can potentially benefit from improvements made during the consolidation phase.
The efforts to reduce cost must go beyond manufacturing process considerations and address factors such as structural design. Design for manufacture can be improved based on the lessons learned. This will help reduce complexity of lay-up pattern and tool design, as well as reduce costs for assembly (without compromising maintenance), process parameter control and digital recording. Also, automation of steps in subsequent manufacturing processes can support quality improvements.
As we look to the future of the aerospace industry, trends emerge in three main areas:
Materials and Processes: We will likely see increased application of thermoplastic material, motivated by significantly shortened process times and the opportunity to use thermoplastic welding for assembly. There also will be substitution of metal with ceramic materials in the hot sections of power plants.
Environment/Process Control/Documentation: Expect to see stabilization of factors in the manufacturing environment, such as temperature, temperature distribution, humidity and time to cure. The airlines also will move toward low-cost sensors, digitalization, advanced software and efficient/fast processors to enable real-time damage assessment after in-service events like lightning strike or foreign object damage (FOD) using “progressive failure analysis.” In addition, recording of process parameters and imaging of lay-up and automated image interpretation/classification will support completion of quality control work during the course of component manufacturing.
Supply Chain: The aerospace industry will engage in clustering through preference for suppliers who have manufacturing units located near OEM-controlled centers of excellence with a network of research centers.
The European Market
By Elmar Witten, Managing Director
AVK, the German Federation of Reinforced
Following the slump in European GFRP production during the economic and financial crisis between 2007 and 2009, the composites industry is now enjoying its fifth successive year of growth, increasing by 2 percent to an estimated total of 1.1 million tons compared to the previous year. (See figure 4.) As in past years, the volume of GFRP manufactured in Europe reflects trends observed in various market segments. Production of thermoplastics, used primarily in the automobile industry, is generally still growing more strongly than production of most thermoset materials. However, in 2017, the strongest area of growth in production volume (5 percent) was continuous processing – especially the pultrusion process. The majority of continuous processes use thermosetting materials.
Within Europe, Germany has the largest GFRP production in absolute terms and the strongest growth. Growth has been consolidating in southern Europe – Italy, France, Spain and Portugal. Currently, production volume is not declining in any European country/region. Trends differ from country to country and also in terms of the major manufacturing processes and materials used. Indeed, the corresponding growth rates can diverge quite significantly.
The composites industry as a whole, and the GFRP market specifically, are extremely diverse in terms of the machinery and methods used. As in other regions of the world, the European market is characterized by a large number of small businesses. However, in many countries 80 to 90 percent of the total volume is produced by just 10 to 20 percent of the companies.
The largest buyers of GFRP components continue to be the transportation and construction markets. These each consume around one-third of total production. The key role played by these two important markets in national economies is one reason why the production of GFRP tends to follow the long-term growth trend in gross domestic product.
Although there is still excellent potential for new applications, GFRP materials are already standard products. The varied nature of the market means that fluctuations in individual customer industries are usually “smoothed out” by applications in others.
GFRP production in Europe continues to grow but is expected to lag behind the global trend, with global production volume well over 2 percent. As a result, Europe’s share of global production continues to fall despite the positive trend in absolute terms.
Often classified as futuristic lightweight materials used primarily in the automotive and aerospace industries, existing applications for composites in other markets – some of them used for decades – are frequently overlooked. These already include many applications in large-scale automotive series production. Moreover, lightweight design is not the only advantage that composites enjoy over other construction materials. FRP has many other useful properties that make it ideal in a number of specific applications, including corrosion resistance, durability and design flexibility.
However, many decision-makers are still unfamiliar with composite materials and their benefits. Improving this situation is one of the most important challenges facing the industry as a whole. The continuing automation and optimization of industrial processes – and the associated challenges of this trend toward “Industry 4.0” – remain important themes.
To continue growing, the European composites industry must deal with the difficulties of establishing composites in the construction/infrastructure markets, as well as changing requirements and developments in the area of mobility. The industry must accept and overcome the challenges it faces and work on perceived weaknesses. If it does, the European composites industry will continue along the successful path it has been following for many years.