The U.S. composites industry is highly fragmented, comprising approximately 3,000 companies. These include suppliers of fiberglass, resin, core, adhesive and other materials to fabricators making bathtubs, utility poles, pipes, tanks, automotive parts, aerospace parts, sporting goods and more. Fiberglass and polyester resin are the dominant materials and represent approximately 58 percent of all materials sold (in terms of dollar value) in the composites industry. Cost of materials typically ranges from 25 to 50 percent of total composites product cost based on the type of application and process used.
In 2013, the composite materials market grew by 1.7 percent to reach $7 billion in value and 4.7 billion pounds in terms of annual shipment. The U.S. gross domestic product (GDP) grew by 2.4 percent in 2013, which will help the U.S. composites market restore confidence again amongst composites part fabricators.
In 2014, the key economic indicators and market dynamics suggest a growth of 5.8 percent. Demand in the U.S. composites market is expected to reach $10.3 billion by 2019, at a compound annual growth rate (CAGR) of 6.6 percent. Strong recovery in the transportation, aerospace and construction sectors is expected to drive this trend through 2019 and beyond as shown in Figure 1.
Figure 1: The U.S. Composite Materials Growth Opportunities by Industry (Source: Lucintel)
Now let’s take a closer look at some industry segments and innovations on the horizon.
Automotive
Auto sales were projected to reach 15.6 million vehicles in 2013, from 14.7 million vehicles in 2012. Growth in automotive demand is mainly driven by low interest rates, increasing consumer confidence and the increasing trend of replacing older cars. Composite materials are used in interior headliners, underbody systems, bumper beams and instrumental panels. The demand for composites in the U.S. automotive market grew by 8.8 percent in 2013. Increase in the use of composite materials in racing and high-performance vehicle components, such as chassis, hoods, wheels and roofs, is one of the driving factors for the increase in composites penetration in the automotive industry.
The Obama Administration’s Corporate Average Fuel Efficiency (CAFE) standards of 36.6 mpg by 2017 and 54.5 mpg by 2025 are likely to provide impetus to the usage of lightweight materials such as composites. To meet the CAFE standards, major OEMs have optimistic plans of reducing gross vehicle weight drastically in their future models. For instance, Daimler had set a target to reduce the gross vehicle weight by 10 percent in all of its new models by 2013. Similarly, GM and Ford set targets of weight reductions of 15 percent by 2016 and 250 to 750 pounds by 2020, respectively.
OEMs are turning to carbon fiber and other lightweight materials to reduce vehicle weight. Demand for carbon composites will significantly grow as major OEMs have entered into joint ventures with carbon fiber suppliers to have a secured raw material supply. Zoltek (now Toray) entered into strategic alliance with Magna International for the development of low-cost carbon fiber sheet molding compounds. Plasan Composites worked with Globe Machine Manufacturing Co. and Weber Manufacturing to develop a manufacturing process called “pressure press” to fabricate automotive composite parts in 17 minutes. The company is developing a resin transfer molding (RTM) process to fabricate parts in 10 minutes.
Another area in the automotive industry which recently attracted a lot of attention is the increased usage of compressed natural gas (CNG) tanks. Rising shale gas exploration in the United States is expected to result in a significant increase in the gas supply, which would boost the need for CNG tanks in the coming years. Demand for natural gas vehicles also is increasing, which will drive the composites tank market higher. Major Type IV CNG tank manufacturer Hexagon Lincoln had plans to expand manufacturing capacity to 80,000 units in 2013 and 160,000 units in 2014, from the capacity of 40,000 units in 2012.
Figure 2: Annual Growth Rate of U.S. Composites Consumption in Automotive with U.S. Lightweight Vehicle Sales 2008-2013 (Source: Lucintel)
Aerospace
Composite materials continue to gain market traction, and OEMs show strong confidence in composites technology. Demand for composite materials in the U.S. aerospace market grew by 10.2 percent in 2013. New aircraft programs such as Boeing’s 787, Airbus’ A380 and A350, Bombardier’s C Series and general aviation aircrafts such as Cirrus and Diamond are utilizing a significantly higher amount of composites than previous aircraft and thus driving composite materials’ growth.
Boeing 787 had a huge order backlog – 884 aircraft – as of October 2013. To fulfill orders, Boeing planned to escalate production capacity of 787s to 10 aircraft per month by the end of 2013, 12 aircraft per month by 2016 and 14 aircraft per month by 2020. Airbus’ A350 XWB had an order backlog of 682 aircraft as of August 2013. A350 XWB is expected to launch in 2015 and have a production rate of 10 aircraft per month by late 2018.
Wind Energy
The Production Tax Credit has remained a key driver for wind energy development in the United States, but the uncertainty of extension led to a “boom and bust” cycle. In 2012, the market grew as renewable energy developers rushed to complete construction in time to qualify for the credit before its expected expiration at the end of the year. This huge increase affected the new wind energy capacity installation in 2013, as most of the planned projects had been completed in 2012. Approximately 3,000 MW of new wind energy capacity was installed by the end of 2013, a 77 percent decrease from 2012.
Advanced materials are making headway in the wind market. GE started using carbon fiber in its two wind turbine models, GE 1.6-100 and GE 4.1-113. Major Brazilian blade manufacturer, Tecsis, is manufacturing wind blades for GE energy using large tow carbon fiber prepreg supplied by Gurit.
Pipe and Tank
Oil and gas and chemical segments together accounted for more than 55 percent of the FRP pipe market in the United States, followed by retail fuel, marine/offshore, waste/wastewater, sewage, power and pulp/paper. In the last five years, the power segment grew at a faster rate with a major focus on large-diameter pipes. There also is a trend toward using large-diameter pipes in sewage applications. In 2013, FRP pipes in municipal water systems and pipe rehabilitation grew slightly.
In the last several years, major players established strategic alliances. The largest FRP manufacturer, NOV Fiberglass, acquired two major U.S. FRP pipe manufacturers – Ameron and Fiberspar. Future Pipe Industries acquired ITT Exelis. Ershigs established a joint venture with Hanwei Energy Service to establish Hanwei Ershigs. Last year, Ershigs acquired Fibra S.A.
FRP tanks had a mixed performance. Underground petroleum-based tanks grew at a faster pace among all segments due to increasing demand of FRP tanks from independent service stations, whereas underground water-based tanks grew marginally.
Other Markets
In the construction industry, composites demand registered 8.3 percent growth in 2013. Construction continues to be the second largest market (after transportation) for composite materials. The main drivers for composites usage are new housing and remodeling, both of which have grown significantly thanks to the economic recovery. The government also is allocating funds for the retrofitting of old infrastructures, especially bridges and roads, which further drives composites demand in the construction sector.
