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Carbon Fiber Manufacturers Increase Production as Composites Market Expands

9/5/2007

Aerospace markets have led recent demand and are expected to grow at a 19% compounded annual growth rate (CAGR) through 2010. However, industrial applications are taking off, too, with a total combined CAGR of 14% through the end of the decade (this segment currently accounts for around 60% of the current demand). Sporting goods CAGR is estimated at 5% over the same time period, resulting in a total overall projected growth rate of a robust 13%. Wind energy could become the second largest market sector after aerospace by 2010. The following table summarizes some of these applications.

Market segments and applications for carbon fibers

With this growth in mind, carbon fiber manufacturers are scrambling to add capacity to meet the demand. The latest is Mitsubishi Rayon Co., Ltd., one of the leading manufacturers of polyacrylonitrile (PAN) based carbon fibers. The company also produces AN (acrylonitrile) monomer, precursor, carbon fiber (regular size), prepreg and finished products such as golf shafts through an integrated production system.

Consumption of PAN carbon fibers was estimated at over 27,000 metric tons for 2006. Global nameplate capacity was estimated to be around 32,000 metric tons. Actual capacity is a number steadily rising towards 30,000 metric ton as large-tow lines have been reactivated and new small-tow production is coming on-line. Pitch-based carbon fiber consumption is centered primarily in Asia, where in Japan demand is around 1000 metric tons for high-performance pitch fiber.

Mitsubishi is constructing an additional carbonization line (with an annual capacity of 2,700 tons) at its Otake Production Center in Hiroshima Prefecture, which was chosen due to its future expansion capabilities. Items to be produced are high-performance carbon fiber, mainly for industrial use. Production is scheduled to start in the fourth quarter (Oct.-Dec.) of 2009 with an investment of approximately ¥12.0 billion. Total production capacity for Mitsubishi Rayon will become 10,850 tpa in 2009 from 8,150 tpa in 2007 as shown in the following table.

Mitsubishi Rayon also built a new carbonization plant at its Toyohashi Plant in May 2007 (2,200 tons annual capacity). With the expanded applications for pressure vessels and blades for wind-power generators, and given the emergence of a new automotive market, Mitsubishi Rayon recognized the need to establish production systems to ensure stable supply in the future.

Carbon fiber use is advancing in automotive applications, especially in luxury performance vehicles with limited production runs, such as the BMW M6 and the Mercedes SLR McLaren. Some time in the future, most designs may use carbon fiber in a hybrid design with glass to provide added stiffness or alone where the added glamour value of using carbon may come into play. Goodyear is incorporating carbon fiber into performance tires by reinforcing the outboard sidewall with a carbon fiber insert that provides stiffness for responsive handling and steering precision. The aftermarket for vehicles is another small but growing market - examples are carbon fiber fenders and helmets for motorcycles.

Other fiber manufacturers have already announced expansions. Toray announced in early February 2007 that it will spend US$451.7 million over the next two years to increase its global production capacity to 17,900 metric tones or output by 4,800 metric tons per year by the end of 2008. Toray says the bulk of its expansion will provide composite materials for Boeing's 787 Dreamliner passenger jet, to be introduced next year. According to Boeing, the wide-body 787 will be the first commercial jet to have a majority of its primary structure made of carbon-fiber composites. Additional expansion plans will bring the firm's capacity to 24,000 tons in 2010, at which time Toray predicts it will capture 40% of the global carbon-fiber market, up from the 34% share it claims today.

Following Toray’s plans, Cytec announced an additional US$150 million investment through 2010 that will double the firm's carbon-fiber capacity. Zoltek is in the process of nearly doubling capacity and SGL recently announced a new partnership to secure precursor. New suppliers are also announcing that they plan on entering the market.

Last April 2006, Toho Tenax, majority-owned by Japan's Teijin, also said it would spend $90 million to increase its carbon-fiber capacity to 11,800 tons in 2008. And in November 2005, U.S.-based Hexcel said it would spend $100 million to build a new carbon-fiber plant near Madrid and add capacity in Salt Lake City by the end of 2008.