LFTs market is ‘heading toward commoditisation’

Path of growth will result in maturity, says Townsend report.
 

23 November 2007 – The market for long fibre reinforced thermoplastics (LFTs) is enjoying strong growth rates, but will enter its mature phase in the next decade, according to Townsend Polymer Services & Information.

In its report on the LFTs industry, Townsend is projecting a 12% per annum global growth rate for LFTs in the 2006-2011 period. It expects that by 2011, more than $400m in new revenue will be created in the global market, based on current average LFT selling prices.

The research group’s Fred Gastrock called LFT a “highly attractive market in both pellet and in-line processing”. But it is on a path leading to maturity, he noted.

“The LFT market has shifted from a seller push to a buyer pull,” he said. “It has moved beyond an emerging market, but it is not yet mature. It is heading toward commoditisation, and will likely transition into a mature business in the next five to 10 years.”

In 2006, China accounted for only 5% of total worldwide LFT consumption, ranking it fourth behind Europe, North America and Japan. But according to Townsend’s report, by 2011 China is expected to surpass Japan, which currently consumes 11% of the world’s LFTs.

Polypropylene remains the dominant resin used in LFT, and the automotive industry continues to account for the majority of end-use applications. About 80% of the LFT demand comes from the auto industry.

Townsend says that nearly half of the LFT volume increase in the next five years will be go into five application areas – front end modules, instrument panels, door modules and underbody shields in automotive and general/industrial goods in the non-automotive sector.

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