Carbon fiber is a new breed of high-strength material. Use of carbon fibre allows reduction in weight of the transport equipments or vehicles; hence fuel efficiency is a major driver for carbon fiber. Demand will also be fueled by increasing use of alternate energy source like wind energy. Experts from the industry project 2014 use of carbon fiber in wind energy will vary from 35 to 50 MT. Carbon fiber began to be used in commercial production in the 1960's mainly for the aerospace industry. At the time the price per lb was extremely expensive (US$150/lb). Increasing commercial applications of the material, has led to a drastic drop in cost to the US$5/lb range. In recent decades, carbon fibers have found wide applications in commercial aircraft (up to 50% of the structure as composites), along with recreational (about 50% penetration in golf and fishing pole as units) and industrial (low penetration with high growth) markets, as the price of carbon fiber has stabilized and technologies have matured. The market for carbon fiber has experienced good growth in recent years. As per Lucintel, the growth rate for the last 23 years was about 12%. Significant changes have taken place in carbon fiber market in last 4-5 years. There was shortage of carbon fiber during 2005-2006, however market scenario is rapidly changing due to global economic recession. From the perspective of carbon fiber suppliers, demand has slipped noticeably in the last six months as the global economy has worsened. At the same time, supply has increased to the degree some manufacturers now have ample supply of carbon fiber with relatively low lead times to consumers. The global carbon fiber market has grown at double digits over the last 5 years and is forecaste to grow to US$2.4 bln in 2014 from US$1.5 bln in 2008, according to Lucintel. In 2009, the global carbon fiber market is expected to have a positive growth of 1.8% mainly due to demand growth in commercial aerospace and the wind energy market. The carbon fiber market is expected to rebound in 2010 and beyond as the market is estimated to recover from the credit crunch and economic recession. For the next five years, the global carbon fiber market is expected to grow 9.8% pa; however, individual results vary greatly from negative growth to as high as 29% pa. Construction, automotive and marine were market segments that were badly hit in 2008 due to recession in industrialized nations and Lucintel is of the view that the decline in several market segments will continue in 2009. Composites shipment in wind energy, and pipe and tank continued to grow at a healthy rate and, according to Lucintel estimates, holds strong promise, albeit at lower rates, during 2009-2014. Asia emerged as the largest regional market in terms of composites shipment in 2008 replacing North America and is expected to maintain its leadership helped by the growing economies of China and India. The global liquidity crunch, low consumer spending and low business confidence continues to affect economies across the world and the decline in composites industry reflects that decline. As per Sri Consulting, global carbon fiber capacity utilization decreased in 2009 as a result of increased capacity and weak demand caused by the global recession. Between 2006 and 2009, world capacity for carbon fibers grew at an average annual rate of approximately 19%, greatly outpacing world consumption, which grew at an average annual rate of approximately 5% during the same period. Although world demand increased during 2006–2007, it weakened considerably during 2008–2009 in most regions, wiping out substantial volume gains since 2006. The following pie chart shows world consumption of carbon fibers: Carbon fibers are noted for their high strength and stiffness, light weight, good fatigue resistance, good electrical conductivity, chemical inertness and low coefficient of thermal expansion. Carbon fibers are used primarily as reinforcing agents in high performance composites with synthetic resin matrices such as epoxies, polyamides, vinyl esters, phenolics and certain thermoplastics. Small quantities of carbon fiber are consumed in composites with carbon matrices; in addition, developmental work is being performed with metal, ceramic and glass matrices. The carbon fiber serves to provide the strength and stiffness of the composite, while the matrix material maintains fiber alignment and transfers structural load among the fibers. Compared with conventional construction materials such as aluminum or steel, carbon fiber composites have some highly desirable properties. Structural members made from these composites can be designed to have twice the strength and more than twice the fatigue resistance of steel; also, they can be twice as stiff as aluminum at half the weight. Major advances in technology and processing have dramatically expanded the demand for high-performance carbon fibers. The introduction of higher-volume and lower-cost fibers and gains in productivity has reduced the manufacturing costs of carbon fibers. Since cost is a major factor affecting demand, continued improvements in performance coupled with increased availability are expected to boost consumption in all regions and applications. Industrial applications will remain the largest world market, helped by significant growth in markets such as wind turbine blades and pressure vessels. As per Sri Consulting, World demand in aircraft/aerospace applications is forecast to surpass sporting goods/recreation to become the second-largest market for carbon fibers by 2014. Europe, North America and Asia are the largest markets for carbon fibers, accounting for nearly 100% of world consumption in 2009. Asia is expected to surpass North America by 2014 as the second-largest market. China has become the single largest consumer of carbon fibers in sporting goods/recreation; it is expected to further strengthen this position, increasing its global share from approximately 55% in 2009 to 65% by 2014. Other markets such as industrial and aircraft/aerospace are also expected to grow significantly in China. World consumption is forecast to grow at an average annual rate of 11.6% during 2009–2014. Demand growth in aircraft/aerospace markets is expected to be significant, especially during 2010–2013, as deliveries of large commercial aircraft such as the Boeing 787 and Airbus 380 ramp up. Demand for carbon fibers is expected to start recovering in 2010; however, the speed and timing of a recovery are still uncertain.