The Global Graphite Felt Market size was valued at USD 731.65 million in 2020 and the market is projected to register a CAGR of 5.86% during the forecast period (2021-2026).
The market was negatively impacted by COVID-19 in 2020. Owing to the pandemic scenario, various end-user industries such as crude steel production and aluminum production, chemical processing industry, metallurgy industry, ceramic industry, mining industry, and others were on a temporary halt during the government-imposed lockdown, such that to curb the new COVID-19 cases, thereby had decreased the demand for graphite felt used in various heat insulation applications of these end-user industries. However, graphite felts and components are also used in processes during the production of semiconductors. Considering the pandemic scenario, the demand for semiconductors has been increased, such that to fulfill the need for data centers, spiking telecommunications volume, increased computers sales, and more. For instance, according to the Japan Electronics and Information Technology Industries Association (JEITA), the total production of semiconductors by the global electronics and IT industries was valued at USD 433.10 billion in 2020, registering a growth rate of 5% Y-o-Y compared to USD 412.30 billion in 2019, thereby had increased the demand for the market studied.
Over the short term, increasing demand from industrial applications and energy efficiency and growing industrialization in the Asia-Pacific region are likely to drive the demand for the market studied.
On the flipside, unfavorable conditions arising due to the impact of COVID-19, are going to somehow hinder the market growth.
Increasing demand for renewable energy is likely to create opportunities for the market in the coming years.
Key Market Trends
Increasing Applications from Heat Insulation Segment
Graphite Felt has the properties of soft flexible high-temperature refractory insulation which makes it a good thermal insulator. It works in a vacuum and protected atmosphere environments up to ~3,000°C.
Graphite felt products are appreciated for their chemical and physical properties such as, chemically inert, thermal resistance, low thermal and electrical conductivity, low thermal expansion coefficient, low friction coefficient, and low coefficient of absorption of X-rays and electrons.
Moreover, these products can be used in different fields, including, crude steel production and aluminum production, petrochemical industry, chemical processing industry, metallurgy industry, ceramic industry, mining industry, oil and gas industry, and other high technologies industries, catering to the needs of insulation. The continuous focus for high yield performance pushes these industries to operate their processes toward extreme temperatures and consequently creates a demand for high-temperature insulating products such as graphite felts, having improved performance.
In India, the production of crude steel and finished steel stood a 108.5 MT and 94.66 MT, respectively, in FY21. Moreover, crude steel production is expected to reach 112-114 MT (million ton), an increase of 8-9% YoY in FY22, thereby is expected to enhance the demand for the market studied from heat insulation application.
In South Korea, with the increasing industrial demand for chemicals in the country, the petrochemical industry is also offering opportunities for investment, with a few companies taking the initiative. For instance, in July 2019, GS Energy and Lotte Chemical planned to build a petrochemical plant as a joint venture. The companies invested USD 677 million for the construction of the plant by 2023, which will further enhance the demand for the market studied.
Graphite felt is specifically designed to perform as a thermal insulator for high-temperature vacuum and inert gas furnaces, among other applications. Furnaces are mostly used as a major component of a central heating system. These are permanently installed to provide heat to an interior space through intermediary fluid movement, which may be air, steam, or hot water.
Graphite Felts also find applications as heat shields and sinks.
Heat shields are blankets manufactured from graphite felts and suspended along the side of the facility or blanketed over equipment for protection. Graphite felts provide an excellent protective barrier between fragile insulation materials and the furnace hot zone.
Heat sinks are a type of heat exchanger that transfers heat generated by an electronic or mechanical device into a moving coolant fluid. The fluid transfers the heat away from the device, allowing it to cool to the desired temperature.
Therefore, all the aforementioned factors are expected to show significant impact on the demand for the market studied.
China to Dominate the Market in Asia-Pacific Region
In the Asia-Pacific region, China is the largest economy in terms of GDP. The country witnessed about 6% growth in its GDP during 2019, even after the trade disturbance caused due to its trade war with the United States. The economic growth rate of China in 2020 was initially expected to be moderate as compared to the previous year. However, due to the onset of COVID-19 in 2020, the economic growth of China witnessed a contraction to 2.3% and is expected to witness recovery at a rate of 8.10% in 2021.
In the year 2020, the value-added industrial output of the country was 31.3 trillion Yuan, which accounted for ~30% of the world’s manufacturing output.
In 2020, China’s steel producers produced 1,324.8 million metric tons of steel which was an increase of 7.7% compared to 2019. In 2020, 7 of the top 10 steel producers by volume of production were from China. The leading steel companies of the country are China Baowu Group, HBIS Group, Shagang Group, Ansteel Group, Jianlong Group, Shougang Group, Shandong Steel Group.
The government of China has decided to cut down the energy consumption per GDP by 3% in 2021 in order to reduce emissions. Since the iron and steel industry is a major polluter, the China’s Ministry of Industry and Information Technology has planned to cut steel output as the most effective way to cut emissions. This is likely to have a negative impact on the market studied.
According to China National Petroleum Corp. (CNPC), the gas consumption in China was expected to rise to 320 billion cubic meters (BCM) in 2020; however, COVID-19 has disrupted the economic activities, thereby affecting the gas demand in the domestic market. But considering the scope of market demand, gas consumption is expected to surge to around 600 BCM by 2040. In order to meet the growing gas demand, the country is planning to double its gas production to 325 BCM till 2040. With such plans, the country is likely to witness numerous refining and gas processing-related construction projects over the long run, which is further expected to create a market for graphite felt for assisting in corrosive and high temperature processing operations.
China, under its 14th Five Year Plan (2021-2025), set the capacity for coal-power capacity to about 1,100 GW. The network operator, State Grid, and China Electricity Council are aiming to develop hundreds of new coal-fired power stations in the country. The country is looking forward to developing power plants, despite the overcapacity in the sector, where more than half of the coal-power plants are witnessing losses and a few plants are running at less than 50% of their capacities.
In the first quarter of 2020, China approved about 10 gigawatts of new coal-fired power generation projects, which is almost equivalent to the total amount approved during 2019. This investment was strategized to help the country recover from the impact of the COVID-19 outbreak on its economy. While such projects will take about two years for development, the demand for graphite felt used in power plants is projected to increase in the next two years.
Therefore, all the aforementioned factors are expected to show significant impact on the demand for the market studied with in the country.
The global graphite felt market is a partially consolidated market with intense competition among the top players to capture the major share in the market. Some of the major key players in the market include SGL Carbon, Morgan Advanced Materials, Nippon Carbon Co. Ltd, MERSEN GRAPHITE, and Schunk Carbon Technology, among others.
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