Global silicone demand is expected to grow about 5 percent in value terms and 3 percent in volume terms annually through 2021, according to Kent Furst, Freedonia Group manager of polymers and materials.
Furst, in an April 10 address to attendees of the 2018 International Silicone Conference in Cuyahoga Falls, Ohio, said the global market in that time will rise to more than $18 billion. Asia-Pacific will remain the largest and fastest-growing silicone market while price growth will accelerate.
His research covered the period from 2006-16. However, he added that 2017 was one of the best years for silicones in some time.
"There will be a shift going forward as China continues to produce more high-value products, with production of lower-valued goods moving toward India and Southeast Asia," Furst said. "In North America and Western Europe, manufacturing growth will remain slow. Despite the benefits from shale gas, North America still has high labor costs and modest economic growth relative to Asia."
Core markets for silicone will continue to be electronics, construction, transportation and medical/personal care, with electronics being the healthiest. Furst added that adhesives will be a key growth driver in the construction segment, and further applications for liquid silicone rubber will help growth on the medical side.
The top six suppliers—Dow Corning (now split between DowDuPont's Dow and DuPont units), Wacker, Momentive, Shin-Etsu, Elkem (formerly Bluestar) and Evonik, respectively—account for 80 percent of the market. And while mergers like Dow assuming full control of Dow Corning and merging with DuPont have changed the structure of the industry, Furst said the overall layout remains unaffected.
Pricing for key raw materials such as crude oil and silicon metal spiked in 2017. Furst said crude oil prices rose 25 percent and silicone metal increased by 20 percent in the U.S. In China, silicon metal prices rose by more than 30 percent.