COVID-19 Impact on Composites Market Industry Revenue

COVID-19 Impact on Composites Market

Economic restoration and growing demand for high-performance materials to drive the composites market in 2021 post-COVID-19 pandemic

The global composites market size was USD 90.6 billion in 2019 and is expected to decline to USD 82.9 billion by 2021, projecting a negative CAGR of 4.4% between 2019 and 2021.Composites are increasingly used in the aerospace & defense end-use industry as theydecrease weight and increase fuel efficiency. In addition, the capability of aerospace composites to maintain a greater strength-to-weight ratio allows for more efficient structural and aerodynamic designs.This has led tohigh demand for composites in the aerospace & defense end-use industry. However, the outbreak of COVID-19 has created ripples in the aerospace industry, leading to reduced demand for composites. For instance, Airbus has temporarily halted the production of A320 and A350 models in Tianjin fromearly February. Due to lockdown in Europe and North America, the demand for composites from the automotive, aerospace and wind energy industries have declined sharply in the first quarter of 2020.

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The aerospace & defense end-use industry isthe largest consumer ofcomposites in terms of value.Composites are corrosion-resistant and are not subject to fatigue damage. The benefits of using composites in theaerospace & defense industry include cost-effectiveness, part consolidation, dimensional stability, and corrosion resistance. More fatigue capability is achieved over traditional jetliners with advanced carbon fiber composite design, enabling bigger passenger windows and lower cabin altitude.

Various types of fibers, such as glass fiber, carbon fiber, natural fibers, among others, are used as composites. The glass fiber composite has the highest demand fromtransportation, wind energy, construction & infrastructure, and other industries. China is the major market for glass fiber composites with assembly, fabrication, and R&D centers for many international wind energy OEMs, such as Siemens Gamesa and LM wind Power. With China, Germany, the US, Spainbeing the most affected countries, the entire supply chain in the wind energy industry is disrupted globally. The lockdown of international borders has reduced the demand for glass fiber composites in Europe and North America.

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Carbon fiber composites account for the second-largest share in terms of value in the global composites market. The carbon fiber and carbon fiber composites manufacturers are in a position to take advantage of the plummeting oil and raw materials prices. However, lockdown conditions in various regions due to the COVID-19 pandemic, the manufacturers are unable to supply their orders to aircraft and vehicle manufacturers

The composites market is segmented based on resintype into thermoset and thermoplastic. The thermoset composites accounted for a larger sharein the composites market. Thermoset composites do not expand under highheat and moist conditions, making them suitable for highly corrosive and high-temperature applications.  The demand for both thermoset and thermoplastic composites is expected to see a decline through 2020-21 due to the pandemic.

Although declined demand will affect the revenue of resin suppliers, they are expected to increase their profit margins from plummeting crude oil prices. Due tothe COVID-19 crisis, severalplayers in the composites market have implemented various strategies. For instance, manycompanies are operating in staggered shifts or running at partials capacities.