With the development of the international situation towards polarization, the global economic downturn, coupled with the impact of the three-year epidemic, almost all industries at home and abroad have encountered difficulties, including the carbon fiber industry known as "black gold. Carbon fiber is considered to be the "king of new materials" in recent decades. Its high mechanical properties and extremely small density make its application prospects very broad. Aerospace, military equipment, medical equipment, rail transit, automobile manufacturing, new energy fields, etc. can all be greatly improved in production efficiency. Then why is the carbon fiber of "Wanting Wanling" going downhill from this year?

"Black gold" carbon fiber prices fell sharply

In previous years, there were many domestic carbon fiber companies, but the overall production capacity was not high. In addition, the market demand was large, and the supply of carbon fiber was in short supply. The seller's market determines that buyers want to obtain sufficient quantities of carbon fiber and need to pay a higher price.

Today, the industry is rapidly turning to freezing point. According to data from Shanghai Steel Union, as of the end of October, the average price of carbon fiber market was 94.7 yuan/kg (including tax). Among them, the price of small tow carbon fiber T300(12K) is 85 yuan/kg, down 39% from the beginning of the year. The price of T700(12K) is 145 yuan/kg, down 37% from the beginning of the year. The price of large tow carbon fiber T300(48K/50K) is 72 yuan/kg, which is lower than that of small tow at the beginning of the year. In the carbon fiber industry, from the source of enterprises to downstream related industries are affected.

The misallocation of supply and demand has led to a rapid decline in carbon fiber prices.

As of the end of October this year, the price of large tow and large tow carbon fiber has fallen by about 40% from the beginning of the year, while the price of small tow carbon fiber has also fallen deeply, with a slightly smaller decline. At present, the theoretical gross profit of the carbon fiber industry has been negative, and the large tow carbon fiber and the low-end small tow carbon fiber represented by T300 are expected to face a loss dilemma, indicating that the development of the carbon fiber industry has been in a downturn. According to professional analysis, weak demand is a very important factor, but while demand is weak, the production capacity on the supply side is increasing rapidly.

Carbon fiber new production capacity released on schedule, and mainly concentrated in low-performance products, the industry continues to roll strangling, price reduction shipments become the only choice. In addition, downstream expansion was less than expected and consumer demand slowed, such as the lack of effective expansion of applications in the wind power sector. In terms of high-performance products, the gap between domestic enterprises and overseas enterprises is still very obvious, and product upgrades will take time. According to the data, domestic carbon fiber consumption in September 2023 was 4197.7 tons, a decrease of 7.8 per cent year-on-year and 13.0 per cent month-on-month.

Supply-side expansion of production, 2023 a number of production capacity under construction have landed, including Jilin chemical fiber 12000 tons of compound material carbonization line, Zhongfu Shenying Xining 25000 tons, the total domestic carbon fiber production capacity has reached nearly 120000 tons/year, a year-on-year increase of nearly 40%. In terms of planning, according to statistics, the domestic production capacity under construction in the next 3 years has exceeded 200000 tons (the global carbon fiber market demand in 2022 is only 135000 tons).

There is no shortage of buyers for high-quality carbon fiber.

The price of carbon fiber has dropped sharply, does it mean that the development of the carbon fiber industry will be delayed? This problem is not only from the domestic point of view, compared to a number of overseas carbon fiber leading enterprises, you can find that their high-quality carbon fiber products sales have not been greatly affected, but there is a steady upward trend.

Japan's Toray, as a leading carbon fiber enterprise, has realized the growth of carbon fiber business against the trend by virtue of all types of products and a wide range of applications. Japan's Teijin has maintained its business stability through diversified applications such as downstream composite materials, and its profits have also increased due to the decline in raw material prices. Heshi of the United States benefited from the strong demand in the downstream fields of national defense industry and aerospace to achieve growth.

Under the background of the pressure on the performance of the global carbon fiber industry, the demand of the carbon fiber industry, especially the high-end fields such as aerospace and pressure vessels, has not been greatly affected, and the related businesses of international giants have basically achieved growth against the trend. It can be seen that the international giant product line layout is extensive, strong anti-risk ability, while the application of carbon fiber downstream composite field is also very important. In contrast, the domestic carbon fiber industry a large number of layout convergence direction, not only the application field is limited, but also easy to lead to price war in the production capacity intensive landing period or affected by downstream demand fluctuations.

How to break the domestic carbon fiber industry?

Since traditional industries have no advantages, it is necessary to start with emerging industries and expand the application layout, such as new energy vehicles, wind power and robot industries. The second is to force new technology, to achieve the existing production line to reduce cost efficiency, accelerate the breakthrough of high-end products.

1, new energy vehicles: with the domestic new energy brands in recent years to the high-end breakthrough, BYD look up, GAC platinum and other independent brands of luxury cars for carbon fiber and other high-end raw materials demand has also increased. For example, a total of 32 parts such as the cover, door and top cover of GAC Hao Platinum SSR model are made of carbon fiber.

According to the existing order data, it is estimated that the number of carbon fiber body cars produced in China in 24 years is expected to reach more than 10000, and its share in China's carbon fiber body market has reached 70%. Downstream partners include BYD's Look Up, Geely's Krypton, Lutes, GAC's Haobo, etc.

2, wind power: wind power blades are the domestic carbon fiber applications in the big head, accounting for more than 30% of the total amount, mainly used in the main beam of sea wind blades. In 2022, China's wind turbine orders reached a new high of 93.8GW, and in January-April 2023, domestic wind power installed 14.2GW, up 35% year-on-year.

It is predicted that the total demand for carbon fiber in the field of wind power blades in China will reach 73200 tons in 2025, with a compound annual growth rate of 34.3 percent, and the market size will reach 8.34 billion billion yuan. Although the demand for wind power has slowed down recently, and many wind power mainframe plants have insufficient power to replace carbon fiber, it is still a relatively stable part of future growth expectations.

3. Intelligent robot: Carbon fiber, as the lightweight core material of robot, can be applied to manipulator and other parts. According to Stratistics Market Research Consulting data, the global humanoid intelligent robot market size is expected to be 14.1 billion US dollars in 2027, which is expected to drive carbon fiber to increase by 52.875 million tons and become the next important growth pole of carbon fiber.

There are indications that the low-end carbon fiber market has become saturated, and the application demand for low-quality carbon fiber products is difficult to expand significantly, and the low-performance carbon fiber market will have overcapacity. At this stage, the national policy direction is needed to encourage domestic carbon fiber enterprises to concentrate, break through the bottleneck of high-end carbon fiber industrialization, open up more application scenarios of high-performance carbon fiber, and improve the production capacity of high-quality carbon fiber, so as to better occupy the initiative in the carbon fiber industry.