Activated Carbon Global Market Outlook:

Market Growth: The global AC market was valued at approx. 1.65 MMT in 2017, and it is set to grow at a CAGR of 8.4 percent to reach 2.5–3 MMT by 2021

Growth Drivers: Regulatory actions across the major economies, increasing emphasis on water treatment, fuelled by the strong global economic growth across all sectors, are escalating the demand for AC

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Cost Break Up
Cost Model for CSAC - Cost Per MMT

  • Raw material cost accounts for 75 percent of the total production cost of CSC. The cost of the raw materials depend on the supply and availability of coconuts
  • The high cost of raw materials, stemming from a current coconut supply crunch, supports the high price trend. However, the recovery of coconut supply could temper the raw material costs in the long term

Price Drivers

  • The availability of raw material plays a major factor in the production cost of CSAC
  • Coconut shells are seasonal and dependent upon weather conditions for the yield
  • Weather patterns, like El-Nino, causes drop in production of coconuts, which leads to surge in production cost
  • Labor costs constitute to about 12–16 percent of production costs and in labor intensive regions, such as India and China, the cost of production will be comparatively lesser than regions with labor scarcity
  • Currently seasonal increase in coconut supply has marginally increased coconut shell availability
  • However, the supplies are not sufficient to cater to the strong demand

Porter’s Analysis on AC

Supplier Power

  • The availability of coconut shells is seasonal and dependent upon weather conditions for the yield, which increases the supplier power significantly
  • Quality-specific demand from buyers on type of wood leads to relatively higher supplier power in the industry

Barriers to New Entrants

  • Capital cost, access to advanced technology, and limited raw material availability, especially coconut shells are hindering the entry of new players

Intensity of Rivalry

  • AC is used in multiple industry applications, which facilitates the need of different types of quality in AC
  • Suppliers compete in the market with quality grades as point of differentiation

Threat of Substitutes

  • Substances, like granulated rubber and coke breeze, have been tested as substitutes for AC, especially in water purification applications, but these materials have not been used on a large- scale basis

Buyer Power

  • End-user applications, like industrial water purification, edible oil refining, and waste water treatment demands higher volume, and hence players in these segments have higher bargaining power
  • Buyers with custom specifications, like pore size and other value-added specifications, have less room for negotiation

Global MArket Outlook on Activated Carbon

Market Growth: The global AC market was valued at approx. 1.65 MMT in 2017, and it is set to grow at a CAGR of 8.4 percent to reach 2.5–3 MMT by 2021

Growth Drivers: Regulatory actions across the major economies, increasing emphasis on water treatment, fuelled by the strong global economic growth across all sectors, are escalating the demand for AC

  • In developing regions, growth in AC demand will be promoted by a combination of regulatory changes, such as revisions in environmental protection law in China, and rising output from key manufacturing industries
  • Industrial air treatment is gaining importance, as many industrializing countries struggle with significant air pollution issues. This, in turn, boosts AC demand from the major industrial economies in the long run to control the mercury levels
  • Demand for AC in mercury removal applications in the US will be more than double by 2020 in response to the full implementation of the US Environmental Protection Agency’s Mercury and Air Toxics Standards
  • Owing to raw material supply challenges with coconut shell-based AC and environmental issues concerning wood-based AC, the market is facing a challenge for a stable supply of AC
  • The trend is anticipated to incline toward coconut shell-based AC, given its advantages in addressing the environmental concerns unlike wood-based AC. There are strategic investments in major producing regions to develop coconut plantation and processing

Porter’s Analysis on Activated Carbon