Ceramic coatings market to pass $10bn by 2020 as proppants continue to struggle

By Myles McCormick
Published: Saturday, 26 September 2015

Despite a 7.5% annual growth expected in ceramic coatings, the ceramic proppants market remains weak as oil flounders, forcing Carbo to idle an additional proppants facility.

The ceramic coatings market will grow at a rate of 7.5% per annum over the coming years, reaching a value of $10.12bn in 2020, according to a report published by Research and Markets

The report, entitled "Ceramic Coatings Market by Type, Technology and by Application – Global Trends & Forecasts to 2020", attributes a significant part of this growth to an increase in the ceramic coating of automotive components. 

It also predicts that the market – in which competition is limited to a small number of manufacturers – will be pushed by new product developments, expansions, and the increasing demand for plasma-sprayed ceramic coating in semiconductor and LCD equipment.

Growth in the US, the largest market for the sector, is expected to grow at a rate of 6.73% over the five year period from 2015.

A spokesperson for APS Materials – a company which supplies the largest part of its ceramic coatings products to the semiconductor industry – told IM that it was seeing a "modest increase" in the sector of approximately 5% annually.

The spokesperson said that since there is such a wide variety of applications for ceramic coatings, there are unlimited possibilities for this market segment to expand. "No one factor will have an overall influence," they said.

The healthcare industry is expected to provide the fastest source of growth for the ceramic coatings industry over the coming years. 

Meanwhile, the outlook for ceramic products in the oilfield market looks less promising, as low oil prices and a pull back in fracking activity continue to hurt proppant suppliers (see pp20-21).

North American proppant producer Carbo Ceramics Inc. said in September that it will idle its ceramic proppant manufacturing facility in Millen, Georgia owing to reduced industry activity levels in the oil and gas sector.

This follows Carbo’s announcement in March that it would be reducing its workforce and cutting its quarterly dividend following severe market deterioration, as well as implement plans to mothball its proppant manufacturing facility in McIntyre, Georgia, until market conditions recover.

"The continued downward pressure on the commodity price for oil negatively impacts industry activity levels and the resulting demand for ceramic proppant," the company’s CEO, Gary Kolstad, said. "Similar to actions taken in the second quarter, we have decided to idle one of our facilities until such time as market conditions warrant bringing it back online."

Kolstad added that the company would continue to manage the remaining output from its other proppant manufacturing facilities, located in Alabama and Georgia in the US, in addition to facilities in China and Russia.

Carbo reported a net loss of $17m, or $0.74/share, for Q2 2015 as proppant sales volumes slid 40% year-on-year due to the challenging oil and gas market.