4 Aug, 2020 By Johny 2 Comments
The Composite material industry status report and future outlook for year 2020–European market
After six consecutive years of moderate growth, European GFRP production remained stable in 2019, with a total output of 114 inches. This stagnation does not mean the stagnation of all markets. In the thermoplastic process, there has been some growth in sheet molding compound (SMC)/bulk molding compound (BMC), resin transfer molding compound (RTM) and pultrusion. Therefore, some Eastern European countries and Turkey are expected to achieve growth in 2019. Overall, instead, glass fiber is still the main material. It is estimated that the global demand for CFRP in 2019 is 141,500 metric tons, accounting for 1% to 2% of the market
The two main market areas of GFRP in Europe are still construction/infrastructure and transportation, with each market accounting for approximately one-third of total production. Compared with the transportation industry (34%), the construction/infrastructure market has become a larger consumer of GFRP for the first time in many years, accounting for 36% of the entire European market. The other two sectors with significant market share in 2019 are electrical/electronic products (15%) and sports/leisure (14%).
In recent years, the growth rate of GFRP production in Europe has been slower than in the Americas and Asia. Reasons for the slow growth include the migration of certain manufacturing processes and methods, as well as the outsourcing of commodity production, which usually has low profit margins. In addition, compared with Europe, certain specific applications and customer industries (such as the automotive industry) in other regions of the world are growing more rapidly. The automotive industry is one of the core pillars of the composite material industry. It is currently undergoing tremendous changes, including constantly changing material requirements, new challenges in drive technology and construction, and innovations such as autonomous driving systems. Any slowdown in the market will deal the biggest blow to countries with large export surpluses in sectors such as Germany. This not only affects OEMs, but also the entire supply chain, including composite material manufacturers and material suppliers.
It is important to note that market trends vary greatly among European countries. Although the overall market stagnated at 1.14 million tons year-on-year, the growth rate of European countries ranged from -2.55% to +4.35%. The country with the largest GFRP/composite material market in Europe is still Germany, with a total output of 225,000 tons (a decrease of 1.75% from 2018). Only Eastern European countries experienced growth last year. Stable production in the UK, Ireland, Austria and Switzerland. All other countries/regions expect production to decline in 2019. Due to increasing uncertainty in the stock market, declining investment rate and overall turbulent economic environment, the overall situation of the composite materials industry has weakened. The gross domestic product (GDP) indicators of Europe as a whole and many of its national economies are now beginning to decline. The market is also adversely affected by increasing political uncertainty within the EU and international trade. Brexit, trade disputes between China and the United States and various countries’ trade protectionist policies are creating insecurity.
Despite these challenges facing the European composites industry, there is still hope. Some areas show great potential, such as the construction of 5G networks and the renovation of bridges and buildings. However, the awareness of composite materials is still too low for decision makers of end users to consider them extensively. This must change because composite materials are a good choice for many applications, if not a better choice. If customers can re-evaluate these materials, and the composite materials meet the standards/specifications, the market growth in the next few years can be guaranteed.