Dublin, Sept. 19, 2024 (GLOBE NEWSWIRE) -- The "Silicones Market 2024-2033" report has been added to ResearchAndMarkets.com's offering.
This industry analyzes the $30 billion global market for silicones. It presents historical demand data (2013, 2018 and 2023) and forecasts (2028 and 2033). Annual historical data and forecasts are also provided for 2020-2027. Volume and value demand are given in both metric tons and dollar value, and discussions on pricing trends, global production, and international trade are also included. Both value and volume demand are broken down by region, country, product, market, and function.
Products covered include: elastomers, silicone fluids, resins, and gels, foams, and pastes. Markets covered include: construction, electronic products, transportation, chemicals and plastics, electrical products, medical and healthcare, personal care, and other markets (industrial and consumer).
This study also evaluates market share and competitive analysis on industry competitors, including China National Bluestar Group (Elkem), Dow Chemical, Dupont, Evonik Industries, Momentive Performance Materials, Shin-Etsu Chemical, and Wacker Chemie.
Global demand for silicones is forecast to grow 3.2% yearly, reaching 3 million metric tons - valued at $29.9 billion - in 2028. Gains will be supported by accelerating construction and manufacturing activity, as well as an improvement in motor vehicle production. The continuing uptake of silicones in lower income countries will also support demand increases. In value terms, gains will be boosted by greater use of better-performing silicones in high-income countries.
Construction & Transportation Markets to Offer Best Opportunities
Although every silicone market is expected to see gains, the best opportunities will arise in the large construction and transportation markets:
- Following a period when a variety of pandemic-related issues - including supply chain backups, high building material costs, and rising interest rates - provided some measure of restraint on building construction, construction activity is expected to accelerate, causing silicone demand in this market to rise. Other trends, including the ongoing urbanization of many developing countries in the Asia/Pacific and Africa/Mideast regions, will also support gains.
- The transportation market is expected to account for a sizable portion of gains as the motor vehicle industry surpasses pre-pandemic levels of production, due in part to an increase in car ownership in many lower income countries.
China's Demand Gains Driven by Construction & Solar Panels
China represents the largest global market for silicones, and it is forecast to account for half of absolute volume gains globally. Gains will be driven in part by a rebound in multifamily housing construction as the country seeks to accommodate its growing urban population, and rising nonresidential building construction as the country's economy and manufacturing base continue to increase. The electrical product market will also see significant gains as China's massive solar panel industry increases its output to meet both domestic and international demand for renewable energy.
Prices Will Normalize Following a Volatile 2018-2023 Period
Between 2018 and 2023, silicone pricing was volatile. Increasing raw material prices and capacity reductions drove prices up by over 10% in 2018. Manufacturers increased silicone capacity in 2019 and 2020 and, in combination with decreased demand during the first months of the COVID-19 pandemic, prices declined in that span. However, as manufacturing and construction activity rebounded in 2021, silicone demand surged enough to quickly outstrip capacity; prices shot up by over 18% in 2021, and an additional 13% in 2022. Price growth was also affected by supply chain issues that limited access to raw materials, causing prices for those materials to also rise quickly. Prices finally moderated in 2023, the result of capacity increases and greater raw material availability.
Prices are expected to rise through 2028, albeit at a much slower pace than was seen in 2021 and 2022, as higher-value silicones see increasing use, especially in high-income countries.
Historical Market Trends
Demand for silicones is impacted by a diverse range of factors, including:
- the overall strength of the US economy
- durable and nondurable goods output
- levels of construction activity
- product design trends
- consumer preferences
- environmental concerns and sustainability initiatives
The widespread use of silicones in numerous markets has historically shielded the industry from the cyclicality exhibited by the construction, motor vehicle, and electronics industries, since silicones are also utilized in less cyclical markets such as the medical and cosmetic and toiletry industries. However, in 2020 most markets were negatively impacted by the COVID-19 pandemic, most notably manufacturing-related markets. Market value was volatile during this period, with price spikes in 2021 and 2022 causing double-digit growth in value terms before declining in 2023 as prices fell.
International Trade
As silicones are high-value materials, making it relatively economical to transport them long distances, they are widely traded across international borders:
- China, US, Germany, Japan, South Korea, and France are the most significant net exporters of these products in the world.
- Germany is the leading exporter relative to the size of its domestic industry. Major external destinations include the US, other West European countries (e.g., Italy and France), India, and Turkey.
- Most other countries are net importers of silicones.
Japanese suppliers - including Shin-Etsu - tend to focus on serving destinations in the Asia/Pacific region, but businesses in the US also buy significant amounts of Japan-produced silicone.
The silicone supply chain is also highly complex, and materials may be traded internationally several times before the final product reaches the customer. For example, basic polysiloxane fluids may be produced at one location and then shipped to a "finishing" plant in another country to be further processed into a silicone emulsion or a functionalized resin. Silicone elastomers are often compounded into customized formulations at intermediate production sites as well.
Pricing Trends
Given the multitude of silicone products and applications, pricing is an important competitive factor in the silicones industry. Silicones prices are principally influenced by:
- trends in the global economy
- price fluctuations of raw materials
- trends in the product mix
Raw material costs - primarily silicon metal - have the most substantial effect on silicone pricing, and these costs are in turn influenced by numerous variables, such as:
- weather and climate
- silicone industry supply and demand trends
- global trade issues
- general inflation
While prices vary between countries, general long-term pricing trends tend to follow a consistent global pattern, given the extensive level of international trade in and the commodity nature of many silicone products:
- Prices are highest in North America (particularly Canada and the US), Western Europe, and Japan because these higher income countries tend to use higher quality and more sophisticated silicone products.
- Prices are typically much lower in low-income areas, as industrializing countries use more basic silicone fluids and elastomers.
Average silicone prices also vary between markets, as different applications require different types of silicone products. The transportation, electronic product, and medical and healthcare markets have the highest average prices for silicones due to the higher quality of materials required and the specialized applications in which they are used. The opposite is true of the construction and chemical markets, which use less complex silicones and therefore have the lowest average prices of the major markets.
The silicone products that prevail in each application also affect average pricing for the category. For example, silicone gels are most used in electronic products. However, gels are the most expensive silicone material type, which drives up the average price in electrical and electronic applications.
Global Manufacturing Outlook
Silicones are used in the production of a wide variety of industrial goods including motor vehicles, electrical and electronic equipment, plastics, personal care products and medical instruments and supplies. As a result of this broad usage across multiple sectors, trends in overall manufacturing can provide helpful insights into the outlook for silicones.
Manufacturing value added measures the difference between manufacturers' receipts from sales and their cost of raw materials. It indicates manufacturing's contribution to total economic output and can serve as a proxy for industrial activity in value terms, allowing for cross-country and interregional comparisons. Global manufacturing value added is forecast to rise 3.4% per year through 2028 in inflation-adjusted terms, marking a modest acceleration from the 2018-2023 pace. Manufacturing activity will be driven by improving general economic activity and rising levels of personal income, both of which will spur demand for manufactured products, as well as further resolution of supply line problems and a lack of raw materials.
Manufacturing activity will expand most rapidly in the Asia/Pacific region, particularly in developing economies. Industrial production in India, for example, is expected to rise 6.3% per year through 2028. China will post growth on par with the regional average, as government efforts to rebalance the economy away from manufacturing toward services limits the pace of manufacturing activity. Smaller regional economies such as Indonesia, the Philippines, and Vietnam will see manufacturing activity benefit as wage rates in China rise and make labor-intensive manufacturing more attractive in other countries.
Growth in Central and South American manufacturing will be just below the global average, a notable upswing from the minimal gains seen from 2018 to 2023. Improving economic prospects in some of the region's larger economies will support manufacturing activity.
Sustainability Initiatives
Recycling
Silicone has several similarities to plastic, in that it can be recycled and reused but degrades each time this is done. During the recycling process, silicone waste is ground or torn into granules, which are then put in a mold with virgin silicone:
- Products that are commonly made from recycled silicone include cooking molds and playground mulch.
- Silicone is also melted down and the resulting silicone oil used in a variety of products for a wide range of end uses, including antifoaming agents, heat transfer oils, hydraulic oils, and lubricants.
Silicone cannot be recycled through many municipal recycling programs; instead, specialized companies perform most of the silicone recycling. Currently, however, silicone recycling rates are extremely low, due to the rarity of these specialized companies that are capable of recycling silicone. However, new capacity for silicone recycling is being added. In February 2021, ECO USA completed phase one in the development of the first silicone rubber recycling plant in the US. The facility currently has a capacity of 500 metric tons of silicone rubber monthly, with plans to increase to 1,000 metric tons per month. In November 2023, Dow and Circusil announced a partnership to build a commercial scale silicone recycling facility in Paris, Kentucky that is projected to begin operations in the fourth quarter of 2024.
In addition, some manufacturers of silicone products have addressed this issue by initiating partnerships with recyclers capable of handling silicone waste. For example, TerraCycle, a global recycling company, has a partnership with Stasher to recycle that company's silicone storage bags. Additionally, GoSili, a producer of silicone cups, can recycle its own products.
Companies Featured
- China National Bluestar Group (Elkem)
- Dow Chemical
- Dupont
- Evonik Industries
- Momentive Performance Materials
- Shin-Etsu Chemical
- Wacker Chemie
For more information about this report visit https://www.researchandmarkets.com/r/ro9bs1
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