Market update: Carbon fiber producers confront supply/demand shift in weak economy

Production of P330 50k and 60k tow carbon fiber, set to begin in 2009, has been pushed back a year because of the global economic slowdown.

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The carbon fiber market is feeling the effects of the recent worldwide economic downturn and fiber manufacturers are adjusting with a variety of interim measures.

Mitsubishi Rayon Co. Ltd. (Tokyo, Japan) has postponed the start of production at its new carbon fiber plant in the Otake Production Center (Otake City, Japan, see end note) for approximately one year. Construction work will come to a temporary halt. While the company sees demand recovering in the long term for a wide range of industrial applications — including wind turbine blades, pressure vessels and vehicles — the downturn has depressed demand in several market sectors and is expected to remain stagnant, with associated delay of new applications. A company spokesman says that the new Otake line won’t take long to commercialize once the project is restarted.

The tentative adjusted time frame for commencement of operations is fourth quarter 2010. Scheduled production capacity is 2,700 tonnes (5.95 million lb) per annum, producing Pyrofil P330 Series, 50K to 60K high-performance standard-modulus carbon fiber tow, primarily for industrial uses. Total investment in the new line is ¥12 billion (~$120 million USD). Mitsubishi confirmed that to meet existing demand and ensure continued supply to current customers, production of 60K fiber at subsidiary Grafil Inc. (Sacramento, Calif.) will be increased in 2009 by adjusting its product mix.

Cytec Industries’ (Piedmont, S.C.) recently appointed chairman, president and CEO Shane Fleming says the company expects to see declines in the overall demand profile for carbon fiber. For that reason, Cytec has decided to delay the completion of its announced carbon fiber expansion project in Greenville, S.C. for at least 12 months. According to Fleming, the decision will reduce the company’s forecast of total capital expenditures for 2009 to ~$180 million, down from its prior estimate of $200 million. Noting that the long-term trend toward greater use of carbon composites will remain intact, Fleming says Cytec will monitor market demand to determine the optimum time to complete the expansion and start fiber production.

The economy has not slowed Akrilik Kimya Sanayii’s (AKSA, Istanbul, Turkey) plans to enter the carbon fiber market. The acrylic and carbon fiber manufacturer operates the largest acrylic fiber facility in the world, representing 12 percent of worldwide capacity, and is using its material to create the precursor for its startup carbon fiber production line. The precursor is now being converted to AKSACA PAN-based carbon fiber at AKSA’s facility in Turkey on a pilot production line. AKSA will start up its 1,500-ton-capacity, full-scale line in mid-2009. AKSA announced on Feb. 27 that it has formed an exclusive relationship with DeLong and Associates LLC (Atlanta, Ga.) to represent and market AKSA’s product to industrial end-users in the Americas, including weavers, pultruders, filament winders, molders and prepreggers.

AKSA believes that industrial consumers of carbon fiber are underserved during periods of high aerospace demand and therefore claims that the scale of its facilities for precursor production will create a favorable cost position, enabling the company to compete effectively under all market conditions. The AKSACA line will produce standard modulus, medium- and high-tensile strength fibers in tow counts of 3K, 6K, 12K and 24K.      

Meanwhile, another aspiring member the world’s carbon fiber-producing community, Sichuan Xinwanxing (Group) Ceramics Co. Ltd (Sichuan Xinwanxing), recently commenced construction on a carbon fiber plant in Leshan, Sichuan province, that will be capable of producing up to 1,000 metric tonnes (2.2 million lb) of fiber annually. The China Chemical Fibers & Textiles Consultancy (Hangzhou, Zhejiang province) reports that the company has made an investment totaling RMB1.2 billion (~$175 million USD). The manufacturing facility will be built on a nearly 100-acre plot of land and is expected to go online in December 2010. After completion of the project, the company expects sales from the production line will increase company revenue by RMB5.0 billion (~$731.8 million) per annum.   

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