The State of the
Carbon Fiber Industry

Carbon Fiber Industry Highlights

Smaller tows are generally more expensive than larger tows, so the trend toward 48K and 50K brought the cost down. This has opened its use up to a wider variety of applications.

Another important considerations is that there are multiple grades of carbon fiber, ranging from high modulus, which is a premium grade, to a lower, industrial modulus level. In the early days, the carbon fiber that was available was primarily high modulus, low tow. This equated to very expensive options that were being used almost exclusively in niche applications and were mostly epoxy based chemistries.

More recently, there is a broader array of available fiber properties – not just high modulus, but lower modulus grade carbon fiber. When you combine this with the transition from 3K tow sizes to 50K, pricing has slowly decreased to allow wider adoption of carbon fiber. We're also beginning to see resin chemistries beyond just epoxy. These include thermoset materials like vinyl esters, as well as thermoplastics.

In recent years, we have seen a significant shift in demand. The emergence of more industrial-grade carbon fibers and thermoplastic-based composites has broadened the range of applications. Examples include applications used in the automotive industry as well as expanding uses in green energy, including modified designs of windmills that incorporate longer wind blades.

Q: Can you discuss the costs involved in the manufacturing of carbon fiber?

A: Carbon fiber production requires a significant investment. Manufacturing carbon fiber is less efficient than manufacturing other fibers, such as glass, and has lower yields. For instance, when manufacturing glass fiber, silica or sand is melted in a furnace to fiberize it. The conversion rate from 100 pounds of sand to glass fiber is typically over 90%.

In contrast, carbon fiber production starts with polyacrylonitrile (PAN) precursor. Every 100 pounds of PAN precursor produces about 50 pounds of carbon fiber. This 50% yield means half of the raw material is waste (consumed in the process and is remediated through the air filtration system). Additionally, the production speed of carbon fiber is much slower. While glass fiber can be produced at speeds of 15 to 20 miles per hour, carbon fiber production speeds are significantly lower, around one to five miles per hour. Both processes are energy-intensive processes, but when all of these factors for carbon fiber production are combined - low yield, slow production speeds, and high energy consumption - carbon fiber is more expensive to manufacture than other fibers.

Today, we see a much more diverse set of applications and resin chemistries, necessitating tailored sizing to optimize performance. For instance, the automotive industry uses carbon fiber in various composite processes, such as pultrusion (a manufacturing process that converts fiber reinforcements and resin matrices into finished composite parts) and filament winding, which require specific sizing to ensure optimal bonding and performance. Other types of resin systems, like vinyl esters and thermoplastics, such as nylon or polycarbonate, demand unique sizing to achieve the best properties.

Q: Can you describe the competitive landscape and its impact on product development?

A: We are seeing more companies, especially from China and Korea, entering the carbon fiber market as demand grows, and particularly in applications like wind energy. These new players contribute to the competitive landscape, driving innovation and expansion.

Michelman is in a strong position due to our comprehensive portfolio of solutions, deep industry knowledge, and ability to adapt to the evolving needs of the industry. Our expertise extends from glass fiber to carbon fiber, allowing us to leverage our understanding across different materials.

Increases in Demand for Green Energy and Sustainability Impact the Carbon Fiber Industry

Demand from the wind energy sector alone has dramatically increased the consumption of carbon fiber over the last 10 to 15 years, and absorbs a significant portion of total production capacity.

Electronics is another sector where carbon fiber has made inroads. Components like laptop housings and connectors benefit from carbon fiber's strength and conductive properties. Carbon fiber's lightweight and durable nature makes it ideal for electronic devices, contributing to thinner, lighter, and more robust products. These applications were not prevalent 20 or 25 years ago but have become increasingly common as the technology and demand for high-performance materials have evolved.

Q: Sustainability concerns are growing across multiple industries. What is the sustainability conversation as it relates to carbon fiber?

A: Carbon fiber composites offer significant environmental benefits due to their performance and lightweighting. By making vehicles, planes, and wind turbine blades lighter, carbon fiber helps reduce fuel consumption and greenhouse gas emissions. For example, lighter cars require less fuel to travel the same distance, and lighter planes consume less fuel during flights, contributing to lower carbon footprints.

In addition to these direct benefits, recycled fiber initiatives are becoming more prominent, with companies focusing on recovering and reusing carbon fiber from products such as decommissioned wind turbine blades, discarded laptop housings, and production waste. Michelman actively supports the use of recycled carbon fiber and is developing solutions that make it easier to recycle carbon fiber. We work with companies specializing in recycling processes to ensure that the recovered fiber is high quality and suitable for reuse in high-value applications. This approach not only supports sustainability but also helps reduce the overall cost of carbon fiber composites by efficiently using existing resources.

Next, the resin is separated from the fiber. This can be done through pyrolysis, where the resin is burned off in a controlled environment, leaving behind the carbon fiber. The resin burned off in this process can sometimes be used as a fuel to feed the system, making the process more energy-efficient. Alternatively, a chemical process can be used to detach the resin from the fiber. This method uses specific chemicals to break down the resin, leaving the carbon fiber intact. The chemicals used and generated can be recovered and might also have their own value streams, contributing to the overall efficiency of the process.

Once the fiber is recovered, it is typically pure and can be resized for reuse. This recycled carbon fiber can then be incorporated into new composite materials, extending its lifecycle and reducing waste. There is also a cost benefit as virgin carbon fiber costs in the range of $7-10 per pound, while recycled carbon fiber can be procured for $3-5 per pound. The ability to recycle and reuse carbon fiber produces a significant economic and environmental advantage and helps promote a more sustainable approach to using advanced materials. 

Lightweighting and Transportation

Q: How is the move toward lightweighting automobiles impacting the carbon fiber industry?

A: Automotive manufacturers are most certainly incorporating more carbon fiber into their designs for lightweighting purposes. A component that weighs five pounds when made from metal might weigh only two pounds if made from glass fiber and even less—perhaps half a pound—if made from carbon fiber. This weight reduction is particularly valuable in industries where weight savings translate to better performance and efficiency, such as aerospace, automotive, and the overall transportation industry. The use of carbon fiber also helps manufacturers improve a vehicle’s fuel efficiency and reduce emissions. This trend has been a contributing factor to the significant growth we’ve seen in carbon fiber usage over the past two decades.

Q: How does carbon fiber's performance in harsh environments benefit transportation?

A: Carbon fiber's resistance to environmental factors, such as corrosion and temperature extremes, makes it suitable for harsh environments. As noted above, in automotive applications, carbon fiber composites used under the hood of a car must resist high temperatures and exposure to chemicals like engine fluids. In contrast, for aerospace applications, components must withstand significant temperature variations and exposure to the elements. Carbon fiber's resilience in variable conditions ensures it can help a variety of parts used in the transportation industry perform reliably over time.

The Future of the Carbon Fiber Industry

Q: How do you see the carbon fiber industry evolving over the next five to ten years? What trends and developments do you anticipate?

A: We expect to see several key developments in the coming years. One major trend is increasing integration along the value chain. Companies are moving beyond just producing fibers and are starting to manufacture intermediates or even final parts. This integration allows them to offer more comprehensive solutions and essentially become a value-added solutions provider.

Another significant trend is the growth in demand for thermoplastic systems. Thermoplastic composites offer several advantages, including faster processing times, recyclability, and improved impact resistance. As industries like automotive and aerospace seek more efficient and sustainable materials, the demand for thermoplastic-based carbon fiber composites will continue to rise. Michelman is well-positioned to support this growth with our extensive portfolio of products and the expertise we provide relative to both virgin and recycled carbon fibers.

Q: What impact does the location of supply have on carbon fiber manufacturers with manufacturing facilities located in multiple countries?

A: Michelman's global presence is a significant advantage as the carbon fiber industry expands internationally. Many of our customers have operations in multiple regions, and the ability to provide consistent products and services worldwide is crucial. Our global footprint allows us to meet customers' needs wherever they are and allows us to support their growth and expansion.

With production facilities and technical support teams in various regions around the world, we're able to respond quickly to market demands and supply chain challenges. We can leverage our global network to source materials, produce high-quality products, and deliver them efficiently to our customers. This agility is essential in a dynamic and rapidly evolving industry.

Q: Are there industry standards or regulations that impact fiber sizing manufacturers like Michelman?

A: The regulatory landscape for carbon fiber is quite different from that of other materials, like glass fiber. The production process for carbon fiber involves unique methods and proprietary technologies, leading to significant differences in the fibers produced by various manufacturers. This lack of standardization makes interchangeability between multiple manufacturers' products challenging.

For example, high-modulus fibers from companies like Toray and Hexcel are not identical and may have different performance characteristics. This variability extends to the sizing chemistries, which are often proprietary to the carbon fiber producers and tailored to specific applications and resin systems.

While some argue that establishing industry-wide standards could accelerate growth, manufacturers are often reluctant to commoditize their products. The unique characteristics of each manufacturer's fibers and sizing are seen as competitive advantages, and there is resistance to standardizing these differences. However, this lack of standardization also means that end-users must carefully specify and source their materials, which can complicate supply chains and application development.

In many cases, the sizing is single sourced and the customer approval is single sourced to a specific grade of carbon fiber. That is the nature of the actual fiber differences and the sizing uniqueness. As a result, customers have deep relationships with carbon fiber producers. An example might be a wind blade manufacturer having a “formal” partnership with a specific carbon fiber producer to ensure their supply position.

Michelman navigates this landscape by developing customized sizing solutions that meet the specific needs of our customers, ensuring compatibility with their chosen fibers and resin systems. This approach allows us to provide high-performance solutions tailored to the unique requirements of each application.

Q: Have there been any recent innovations in manufacturing fiber sizing or the carbon fiber industry in general?

A: The carbon fiber industry is continually evolving, and there have been significant innovations in fiber sizing and other areas. As previously stated, carbon fiber sizing was primarily designed for epoxy systems, as these were the dominant resin chemistries in the market. However, as the range of applications expanded and new resin systems were introduced, there was a need for more specialized sizing.

Today, we see advancements in sizing tailored to specific resin systems, such as nylon, polycarbonate, and vinyl ester. This specialized sizing helps optimize the properties of carbon fiber composites for various applications. For instance, a sizing that works well with nylon might not be suitable for polycarbonate or vinyl ester. Having customized sizing for each resin system ensures that the carbon fiber composites achieve the best possible performance.

In addition to resin compatibility, the form of the fiber also influences the choice of sizing. For example, chopped fibers require different sizing compared to continuous fibers. The specific requirements of each application, such as automotive components, sporting goods, or aerospace parts, dictate the type of carbon fiber, resin system, and sizing used. At Michelman, we're continually innovating and developing sizing for specific applications.

Q: Are collaborations and partnerships critical success factors in the carbon fiber industry?

A: Collaborations and partnerships are crucial for success in the carbon fiber industry. The landscape is complex, with various players involved in producing fibers, developing resins, manufacturing composites, and creating end-use products. Collaborations help bridge the gaps between these different stages, facilitating innovation and accelerating the pace of development for new solutions.

Additionally, collaborations with end-users, such as automotive and aerospace OEMs, are essential for understanding their specific requirements and developing tailored solutions. By working closely with these companies, we can ensure that our sizing and composites are optimized for their applications, leading to better performance and greater customer satisfaction.

The trend towards more integrated value chains is also driving collaboration. Companies are increasingly looking to add capabilities or pursue mergers and acquisitions in order to offer a complete portfolio of products and services, or to establish footprints on multiple continents. This integration helps streamline supply chains and improve the overall efficiency of the industry.

As the industry grows and becomes more complex, there is most certainly a need for greater cooperation between fiber producers, resin manufacturers, composite fabricators, and end-users. By working together, we can accelerate innovation, improve efficiency, and develop better solutions for the market.

Q:  Are there any supply chain issues of note in the carbon fiber industry?

A: The carbon fiber industry has certainly faced supply chain challenges. While the COVID-19 pandemic exacerbated the situation, a significant hurdle moving forward will be balancing supply and demand as the market grows. Investing in new carbon fiber production facilities is a significant and costly endeavor, requiring careful consideration of market conditions and economic viability. As the market expands and competition increases, pressure on margins will also rise, making it essential for manufacturers to manage their supply chains effectively.

Michelman navigates these challenges by maintaining strong relationships with suppliers and customers, ensuring we can meet demand and deliver high-quality products. Our global presence also helps mitigate supply chain risks by providing multiple production locations and a diverse supply base.

Q: Is there anything else you'd like to add about the state of the industry?

A: The carbon fiber industry is poised for significant growth and transformation in the coming years. We are excited about the opportunities ahead with ongoing technological advancements, a focus on sustainability, and increasing collaboration. We are committed to playing a leading role in shaping the industry's future.