Vulcanized fiber is versatile engineering material consisting of cellulose paperboard insulation. It is primarily used due to its excellent electrical insulating properties. The fiber is tough, resilient, horn-like material that is lighter than aluminum and harder than leather. It can be easily machined and formed in any forms such as sheet, coil, rod, tube, and rolls.
Vulcanized fiber comprises versatile combination of properties such as high mechanical strength, excellent resistance to heat and cold, good arc resistance, and has high tensile and compressive strength. It is produced in special grades such as commercial, electrical, abrasive, flexible, bone, trunk and others. These grades find applications in washers, insulating plates, switch and appliance insulation, gaskets, automobile parts, and electric motor insulation, among others owing to their superior properties.
As per MRFR analysis, the global vulcanized fiber market has been segmented on the basis of type, application, and region. Based on type, the global market has been divided into commercial grade, electrical grade, trunk grade, bone grade, abrasive grade, flexible grade, and others. The commercial grade segment dominated the global market, accounting for 31.32% of share in 2021. This is due to the excellent mechanical and electrical properties offered by it as well as availability in a wide range of colors. It was followed by electric grade segment estimated to reach USD 609.5 million by 2030 growing at a CAGR of 5.8%.
On the basis of application, the global market has been segmented into electrical, abrasive, automotive, textile, and others. The electrical segment accounted for 46.10% of the global market share in 2021 and is projected to register a CAGR of 6.2% during the assessment period. The growth of the segment is due to the high demand for electronic devices across the globe, on the backdrop of increasing disposable income.
According to the MRFR analysis, the global vulcanized fiber market was valued at USD 1,398.51 million in 2021 and is expected to reach a value of USD 2.23 billion by 2030 with a CAGR of 5.47%.
In terms of volume, the global market was sized at 401.34 kilo tons in 2021 and is projected to reach 583.95 kilo tons at a CAGR of 4.33% during the review period. The growth of the global vulcanized fiber market is primarily driven by its extensive use in the electrical & electronics industry. This is due to its superior properties such as exceptional dimensional stability, mechanical strength, lightweight, dielectric strength, high punching and high surface resistance, excellent electrical insulation, and anti-static nature. The rising demand for electrical & electronics devices such as home appliances, smartphones, laptops, and gaming devices are projected to fuel the demand for vulcanized fiber in electrical & electronics applications.
The other factor propelling the growth of the global market is its wide use in abrasive fiber discs and in textile power looms. The fiber discs are used for machining of steel grades of automobile body parts such as panels, doors, engine blocks, gears, suspension, wheels, fuel tanks, and steering. The high production and sale of automobiles across the globe is expected to boost the global market growth during the forecast period. The growth of the textile and apparel industry on account of changing lifestyles as well as increasing disposable income are projected to fuel the product demand during the forecast period.
Additionally, the widening scope of applications, i.e., the use of vulcanized fiber into furniture designing, osmosis filtration, and medical applications is expected to create lucrative opportunities for the manufacturers of vulcanized fiber. However, the availability of close substitutes and volatility in cotton production are factors expected to hamper the global market growth during the review period.
COVID-19 Impact on Automotive Interior Leather Market
The primary raw material for vulcanized fiber production is cotton lint. According to World Trade Organization (WTO), cotton production accounted for 2.5% of the world's arable land, and the annual value of global cotton production in 2021 was estimated to be USD 50.6 billion considering only cotton fiber. The corresponding demand for fibers decreased by 12% YoY from 113 million tons in 2019 to under 99 million tons in 2020, however the demand rose to over 113 million tons in 2021 as a result of major economies coming back to normalcy. The demand in fibers experienced a major decline based on a weakness of end markets. As the markets are recovering the consumption of cotton is expected reach 124.14 million bales by the end of 2021-2022, thus affecting the price margins and causing disruptions in the global supply chain. Furthermore, China’s consumption is expected to decline due to continued lockdowns as a major to control the spread of virus and in addition the drawdown of non-customs cleared cotton from the port warehouses. As a result of reduced imports from China, the world trade is expected to decrease by 5%.
Many businesses have had to close, sometimes permanently, because of a combination of factors such as low demand, low production, a lack of raw materials, a lack of operating capital, rising freight rates, and a lack of available workers. Pulp and paper mills, textiles, and other product manufacturers are a few examples. Most businesses in the forest sector are micro, small, and medium-sized enterprises (MSMEs) in developing countries, making them particularly vulnerable to economic downturns. Other forest-based items, such as packaging materials, wooden pallets, and tissue for toilet paper and masks, have remained steady or even increased in demand.
The COVID-19 pandemic has had a significant impact on all aspects of global society and economies. Late in 2019, in China, and early to mid-2020 in many other countries, economies appeared to come to a halt as governments urged people to stay at home to reduce disease spread. The US GDP fell by a record 32.9% in the second quarter, as the unemployment rate surpassed 15%. Some of the immediate consequences of the virus and the government's response included public health implications, business closures, supply chain disruptions, and demand shifts.
The textile industry is an unorganized sector across the globe. In most of the manufacturing hubs, the industry is mostly dependent on migrant workers. With lockdowns in the major parts of the world, the migrant workers returned to their hometowns, which resulted in the total disruption of workflows and production schedules. Disruptions in supply chains have led to a global decrease in exports and imports, as many European exporters and importers barred shipments from various parts of the world. The industry was further affected by the shutting down of retail shops and production units. However, most of the manufacturers were directed by the governments to produce essential goods to tackle the covid-19, and many others recalibrated their production policies and emergency contingency.
The global vulcanized fiber market is characterized by the presence of many regional and local vendors. The market is highly competitive, with all the players competing to gain maximum market share. The increasing vulcanized fiber demand in the end-use industry for construction is boosting the sales of vulcanized fiber, which is the key driver of the market. The vendors compete based on cost, product quality, and the availability of the products according to the geographies. The vendors must provide cost-effective and high-quality vulcanized fiber to compete in the market. The competitive scenario is fragmented between the tier-1, tier-2, and tier-3 companies, while tier-1 and tier-2 companies hold over 60% of the global market share.
The market players' growth depends on the market and economic conditions, government regulations, and industrial development. Thus, the players should focus on expanding the production capacity to meet the demand and enhance their services. Emco Industrial Plastics, Dynos GmbH, Iten Industries, Inc., ESPE Manufacturing Co., Franklin Fibre-Lamitex Corp., Hokuetsu Toyo Fibre, Thrust Industries, Oliner Fibre Co., Inc. Dante Bertoni Srl, and New Process Fibre Company, Inc. are the major companies in the market at the present that are competing in terms of quality, price, and availability. These players are primarily focusing on the development of vulcanized fiber. Although the international players dominate the market, regional and local players with small market shares also have a moderate presence. The international players with a presence across the globe, with established manufacturing units or sales offices, have strengthened their presence across major regions such as North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa.
North America: In 2022, North America will hold a sizable market share for Vulcanized Fiber. The growing demand for the vulcanized fiber from electrical industry, especially in the US drives the North American market. Additionally, the growing demand to produce automotive and abrasive drives the North American market.
Europe: Germany accounted for the largest market share of 25.42% in 2021, with a market value of USD 68.1 million; it is expected to register the highest CAGR of 6.52% during the forecast period. France accounted for the second largest market share in 2021, valued at USD 54.1 million; it is projected to exhibit a CAGR of 6.18%.
Asia-Pacific: The vulcanized fiber market is also anticipated to grow throughout the forecast period due to rising demand for electrical & automotive in developing nations like China and India. Because of the high demand for vulcanized fiber for electronics & automotive, North America has been actively monitoring the Asia-Pacific market.
Latin America: Due to technological developments in these countries, it is anticipated that the Brazil and Mexico will experience considerable growth over the projection period. The Brazil segment accounted for the largest market share of 41.09% in 2021, with a market value of USD 26.4 million; it is expected to register a CAGR of 4.45% during the forecast period. The Mexico segment accounted for the second largest market share in 2021, valued at USD 21.3 million; it is projected to register the highest CAGR of 5.04%.
Middle East & Africa: The main reason fueling demand for electric vehicles in the Middle East and Africa is the region's growing need for products that use existing energy sources more efficiently. The GCC Countries segment accounted for the largest market share of 57.44% in 2021, with a market value of USD 55.4 million; it is expected to register the highest CAGR of 5.26% during the forecast period.
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