At the start of 2020, composites industry pundits couldn’t have predicted the impact a global pandemic would have on the market. The U.S. composites industry showed signs of growth, but was soon derailed by plant closings, employee layoffs and postponed projects in response to COVID-19. However, composites professionals are resilient and by the end of last year, signs pointed to a steady recovery. In our 2021 State of the Industry Report, five experts share their expectations for key materials and markets.
The Glass Fiber Market
By Dr. Sanjay Mazumdar, CEO, Lucintel
2020 was a crisis management year for composites industry players due to COVID-19, which caused a cash flow and demand crisis, supply chain disruptions and worker safety issues. While last year was challenging, the outlook appears brighter for 2021.
At the beginning of 2020, the U.S. composites industry started fairly well and showed good signs of growth similar to 2019. By the end of March, new orders were delayed and sometimes canceled. During the second quarter, particularly in April and May, the impact of the pandemic was at its greatest, resulting in one of the sharpest and deepest economic contractions since the Great Depression. More than 20 million people lost jobs in the summer, and plants were shut down across sectors. Transportation, construction and marine were hit the hardest, which resulted in a 20% decrease in demand for U.S. glass fiber in Q2 2020 compared to Q1 2020. The impact of COVID-19 was reflected in the financial results of many composites industry players during the first half of 2020 in terms of poor sales and profit margins.
However, the second half of 2020 saw one of the fastest recoveries in the economy and the composites industry. Since July 2020, the U.S. composites industry has started to see an increase in demand from various end-use industries, including automotive, marine and construction, driven by stimulus packages and plant re-openings. As a result, the U.S. glass fiber market grew by approximately 23% in Q3 2020 compared to Q2 2020. In Q4 2020, the U.S. glass fiber market remained strong, and November saw approximately 5% growth compared to November 2019.
By the end of 2020, the glass fiber market could not recover fully from the dent of the pandemic and was expected to witness a decline of about 6%, with demand dropping to 2.44 billion pounds compared to 2.59 billion pounds in 2019. The impact of the coronavirus was irregular across value chains, with automotive, pipe and tank, aerospace and marine applications experiencing significant declines, while wind energy, electrical and electronics, and construction remained positive.