by David Hwang and Jurron Bradley, Lux Research
April 1, 2010 – Since pioneers Showa Denko and Hyperion Catalysis first started producing multi-walled carbon nanotubes (MWNTs) in 1983, dozens of companies have entered the fray, looking to claim a share of a potentially massive market. However, market adoption has taken much longer than many expected, ultimately driving companies without proper financial backing into the red. Despite the gloom, MWNT suppliers aren’t an endangered species, as more than 35 commercial suppliers are still active.
Across the industry, producers are increasing capacity with hopes of lower costs and greater market adoption. The ongoing game of one-upsmanship is pushing market leaders to increase their capacities by more than four-fold in order to prevent becoming priced out of the market by their competitors. In 2008, global MWNT production capacity totaled just 423 tons, but today it weighs-in at 1,334 tons, a whopping 215% increase. Moreover, once current capacity expansions are completed (likely in 2010 and 2011), total capacity will swell to 2,389, a 416% increase over 2008 levels. Note that some plans to scale-up are confidential and thus are not included in the table below.
Figure 1. Key MWNT suppliers. (CCVD = catalytic chemical vapor deposition; SME = small or medium-sized enterprise) |
Looking closer, production capacity is owned disproportionately by the largest five suppliers: Showa Denko, CNano Technology, Arkema, Nanocyl, and Bayer MaterialScience. CNano Technology completed construction of its 500 ton production facility in June 2009, and Showa Denko finished building a 400-ton plant in March 2010, bringing its total up to 500 tons as well, making them the two largest suppliers. The other three suppliers — Arkema, Nanocyl, and Bayer MaterialScience — are scheduled to bring multi-hundred-ton facilities online in late 2010 and early 2011. Together, the five largest suppliers operated 54% of the world’s total production capacity in 2008 — and after completing the planned scale-ups, they will operate over 86% of the global production capacity in 2011. The massive scale-up and resulting cost reduction will further cement their dominance over second- and third-tier suppliers, making it even harder for the smaller producers to compete.
Figure 2. Announced MWNT production capacity. |
Don’t fall for the hype, however — because the market isn’t expanding at the same rapid scale-up rate. In fact, with a few exceptions, average utilization of production capacity per company is likely in the low double-digit percent. Specifically, we estimate that producers sold only 124 tons of MWNT in 2008, meaning a 30% utilization of capacity globally. With the producers undergoing such massive scale-ups, the amount of idle capacity is set to expand even further in the near-term, as sales grew approximately 35% in 2009, but production capacity more than doubled. This oversupply situation will likely persist at least through 2015.
While the extra capacity will not equate to additional revenue immediately, it will help MWNT’s long-term prospects. For one, scale-up to date has driven prices down from the dollars/gram range to $100/kg today, and producers ultimately hope to achieve $50/kg. When MWNTs were dollars/gram, industries turned their backs — but now that the economics for using MWNTs are quickly becoming favorable (especially in composite applications) they’re showing a renewed sense of interest. Additionally, further price reductions will help MWNTs expand out of small-volume niche applications like fishing poles and into larger and more cost-sensitive markets like car body panels. More broadly, producers are pushing their products into the automotive, aerospace, electronics, wind power, and energy storage industries — all of which will to drive demand for the next decade.
Biographies
David Hwang received a BSE in Bioengineering from the University of Pennsylvania and is research associate at Lux Research Inc., e-mail [email protected].
Jurron Bradley received his Ph.D in chemical engineering from the Georgia Institute of Technology and is senior analyst at Lux Research Inc.