Sponge Zirconium Market - Forecast(2023 - 2028)

Sponge Zirconium Market Overview

The sponge zirconium market size is forecast to reach US$857.2 million by 2027, after growing at a CAGR of 5.3% during 2022-2027. Globally, the usage of sponge zirconium in various applications of chemical, military, nuclear and other industries is driving the market growth. The increasing utilization of industrial grade sponge zirconium in nuclear industry to produce zircaloy for nuclear reactor components is driving the demand for sponge zirconium. Additionally, sponge zirconium, is a sliver metal which is utilized for the manufacture of structural materials and components for submarines, power generation reactors, and other applications in military and defence industry. Additionally, sponge zirconium is applied for the manufacture of chemical corrosion resistance equipment in nuclear and defence industry. It is also known to resist different types of corrosions including pitting corrosion which is forecasted to drive the global sponge zirconium industry growth.

COVID-19 Impact

The COVID-19 outbreak widely affected the nuclear industry, military industry, chemical processing, and other industries. Owing to nationwide lockdown, the production process of various goods in these industries declined due to the non-functioning of the manufacturing plants. Economies of each sector got affected and resulted in stagnation of activities across the sectors that use sponge zirconium. For instance, according to the European Parliament, the fall in demand for chemicals inevitably resulted in shrinking production and reduced supply. In June, a 2.9% output growth was registered compared to May, showing some early and modest signs of recovery. Altogether, the total output for the chemical sector dropped by 2.8% from January to November 2020 compared to 2019. However, rising demand for nuclear reactor, and chemicals emerged as a driving factor for the sponge zirconium market during these challenging times. 

Report Coverage

The report: “Sponge Zirconium Market Report – Forecast (2022 - 2027)”, by IndustryARC, covers an in-depth analysis of the following segments of the global sponge zirconium industry.

Key Takeaways

 Figure: Asia-Pacific Sponge Zirconium Market Revenue, 2021-2027 (US$ Million)

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Sponge Zirconium Market Segment Analysis – By Grade Type

The nuclear grade segment held the largest share in the sponge zirconium market in 2021. The main usage of sponge zirconium which is a sliver metal, is in the nuclear grade in nuclear industries to produce zirconium alloys that is zircaloy for nuclear reactor components such as cladding in fuel elements and also nuclear grade sponge zirconium has a higher purity as compared to industrial grade, metallurgical grade, and other grades. In nuclear industry hafnium in a minimum content is also required, however of which about 70 percent is nuclear grade. Additionally, nuclear grade zirconium sponge is primarily used for the powdered aircraft industry and nuclear submarines. Thus, with the rising demand for nuclear grade, the market growth for global sponge zirconium is expected to rise in the forecast period. 

Sponge Zirconium Market Segment Analysis – By Application

The military & defence industry held the largest share in the sponge zirconium market in 2021 and is expected to grow at a CAGR of 5.8% during 2022-2027. In the military & defence segment, sponge zirconium in powdered form is utilized in the production of fire-inducing materials, military blowing agents, and flash powder. Nuclear grade sponge zirconium is an essential military strategic metal, utilized for the manufacture of structural materials and components for submarines, power generation reactors, and aircraft carriers. Additionally, Industrial grade sponge zirconium is primarily used for the manufacture of chemical corrosion resistance equipment in military and defence industry. The rise in the military and defence industry with rapidly increasing government investments, is driving the sponge zirconium market growth. For instance, according to the Indian brand equity foundation (IBEF), in October 2021, India signed contracts and cleared projects worth US$ 7.21 billion, to enhance military capability with locally produce weapons and systems, including tanks, airborne early warning systems, transport planes, counter-drone weapons, and helicopters. Thus, with the growth of the military & defence sector, the market growth for global sponge zirconium will further rise over the forecast period. 

Sponge Zirconium Market Segment Analysis – By Geography

Asia-Pacific region dominated the sponge zirconium market with a share of 39.5% in the year 2021. The Asia Pacific region is predicted to continue its dominance in the market during the forecast period due to the increasing requirement for sponge zirconium in developing countries such as China, Japan, India, and South Korea. India is expected to continue its dominance in the sponge zirconium market during the forecast period. This is due to the growth of the chemical industry in the country. For instance, according to the Indian Brand Equity Foundation, in 2019 the Indian chemical industry stood at US$ 178 billion and is expected to reach US$ 304 billion by 2025. The chemical industry is expected to contribute US$ 300 billion to India’s GDP by 2025 and an investment of Rs. 8 lakh crore (US$ 107.38 billion) is estimated in the Indian chemicals and petrochemicals sector by 2025. Sponge zirconium is also applied in military, nuclear, and other industries. It is widely utilized as an oxygen getter and catalyst. Zirconium sponges are cellular structures produced with a large volume fraction of pores. Sponge exhibits characteristics such as low-density, high-energy absorbance, high stiffness, low thermal conductivity, fire and pitting corrosion resistant, sound dampening qualities, and low magnetic permeability. Hence, zirconium sponges are used in applications such as heat exchangers, flow diffusion, lightweight optics, and for energy absorption. Thus, the increasing demand and growth in applicable industries, will drive the sponge zirconium market growth in the forecast period.

Sponge Zirconium Market Drivers

Surging Demand for Sponge Zirconium from Chemical Processing Sector

Sponge zirconium forms an oxide film at room temperature. This oxide film makes sponge zirconium and its alloys to have a good corrosion resistance characteristic. Additionally, it has good mechanical and heat transfer characteristics, along with the cost advantages, making sponge zirconium a good corrosion-resistant structural material in chemical processing industry. The increasing government investments in chemical sector is driving the market growth. For instance, according to the Indian Brand Equity Foundation (IBEF), in November 2021, Indian Oil Corporation (IOCL) invested Rs. 3,681 crores (US$ 495.22 million) to set up India’s first mega-scale maleic anhydride unit for manufacturing high-value specialty chemicals at its Panipat Refinery in Haryana. Thus, the rising growth and increasing investments in chemical processing industry, the market growth for global sponge zirconium is estimated to rise in the forecast period.

Increasing Nuclear Industry Is Driving the Sponge Zirconium Market Growth

The primary use of sponge zirconium in the nuclear industry is to produce zirconium alloys for nuclear reactor components, such as cladding for fuel rods. The growth and increasing investments by the government in the nuclear industry is driving the market growth. For instance, according to the world nuclear association, France derives about 70% of its electricity from nuclear energy, due to a long-standing policy based on energy security. In February 2022, France announced to build six new reactors and to consider building a further eight. Additionally, according to the government of Canada, Ontario invested US$25 billion over 2016-2031 to extend the life of 10 nuclear reactors to maintain nuclear power capacity. Thus, with the increasing growth of the nuclear industry, the market growth for global sponge zirconium is estimated to rise in the forecast period. 

Sponge Zirconium Market Challenges

Strict Regulations Regarding the Use of Zirconium will Hamper the Market Growth 

The utilization of zirconium is a major concern due to the health problems associated with it. Since, exposure to zirconium can cause eye irritation, lung irritation, and allergic skin reaction. Many governing bodies are continuously monitoring the proper use and effect on human health of zirconium. For instance, the Occupational Safety and Health Administration (OSHA) has set an exposure limit of 5 mg/m3. Thus, such strict regulations associated with the usage of zirconium is estimated to hinder the sponge zirconium market growth during the forecast period. 

Sponge Zirconium Market Industry Outlook

Technology launches, acquisitions, and R&D activities are key strategies players adopt in the sponge zirconium market. Global sponge zirconium top 10 companies include:

1. ATI Metals
2. Western Zirconium
3. Cezus-Areva
4. Chepetsky Mechanical Plant
5. State Nuclear Baoti Zirconium
6. Guangdong Orient Zirconic
7. China Nuclear Energy Industry Corp.
8. Nuclear Fuel Complex
9. Jiangxi Kingan Hi-Tech Co. Ltd
10. Shanghai Greenearth Chemicals Co., Ltd 

Recent Developments

• In October 2021, Russia has developed a new process line for manufacturing the zirconium sponge needed for nuclear fuel assemblies. A new facility to make the substance has been launched by Rosatom subsidiary TVEL at its Chepetsky Mechanical Plant.
• In August 2020, China developed nuclear class sponge zirconium, developed by China Nuclear Energy Industry Corp., a subsidiary of China National Nuclear Corporation.

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