4 silicone trends taking shape for 2023

Much like 2021, the silicone industry saw soaring demand, choked supply lines and labor retainment difficulties.

Bucking some expert predictions, raw material pricing did not plateau in 2022 after a year of volatility—rather, pricing dropped slightly.

But unlike last year, upstream silicone suppliers—specifically in the HCR, LSR and fumed silica spaces—made some major investments to increase capacities.

Shin-Etsu, Dow and Elkem all invested millions in capital projects.

In China and India, Wacker went one better, with investments in siloxane monomer production increases.

Monomer production remains a conspicuous domestic absence, as Dow still is the only vertically integrated silicone manufacturer on U.S. shores—meaning Dow can go from quartzite mine to silicone rubber.

And adding to the problem of monopolized production, at least geographically, is the fact that the vast majority of the world's silicon metal refineries are located in China, described by silicone rubber processors as "a wake-up call" and "a national defense issue" for the industry.

Here are four of the biggest news trends in 2022 in silicone.

Prompted by some downstream silicone rubber processors and supported by some upstream, North American silicon metal refineries, the dearth in domestic silicon metal refinement took center stage in May.

When China's self-imposed brownouts of several major silicon metal refining facilities occurred in 2021, the tenuous nature of global capacity for the essential material fell into stark contrast for silicone rubber processors in North America.

For many, that was the moment when domestic manufacturers of silicone rubber—who depend on a steady stream of high-purity silicon metal—realized the effects of having about 70 percent (about 6 million of the 8.5 million metric tons produced globally in 2021) of the world's refined silicon metal produced at foundries in China.

Only about 5 percent of global capacity is produced in the U.S., a distant fifth behind Russia, Brazil and Norway, according to Portland, Ore.-based Allied Market Research.

Five North American companies, including Canada's Sinova Global, Mississippi Silicon L.L.C. and Ferroglobe P.L.C., accounted for a majority of domestic production.

Dow also refines a portion of its own silicon metal—about 300,000 metric tons per year—through joint ventures with Ferroglobe at two North American locations.

Refined silicon metal is used in varying grades in aluminum alloy, microchip, solar panel, battery and silicone rubber production.

MUNICH—Wacker Chemie A.G. had a big year.

In just about every conceivable way, the German silicone giant made investments, from capacity increases in HCR and LSR, to planned increases in silicon metal refinement and monomer production, to capital infusion for research and development centers.

In total, Wacker announced more than $300 million in global and domestic investments.

In July, the U.S. silicone market gained Wacker Chemie A.G.'s full attention, as the world's second-largest producer of silicone materials announced a $200 million expansion at the Tennessee Valley location.

A feasibility study is ongoing for the project.

Earlier that same month, Wacker began HCR and LSR production in Panagarh, India.

The plant, at 165,000 square meters, is three times the size of another Wacker production plant that sits about 100 miles to the southeast of Panagarh in Amtala, near Kolkata.

In addition to Panagarh, sites in Pilzen, Czech Republic, and Tsukuba, Japan, are earmarked for expansions.

Wacker announced additional expansion measures in Zhangjiagang, China, though no permanent plans to increase capacity at that site have been finalized yet.

In addition to Tennessee (on domestic shores), Wacker announced an LSR expansion in Adrian, Mich. The company expects additional LSR capacity to originate from expansions in Burghausen, Germany, set for an end-of-year completion.

And in May, Wacker began the push to expand silicon metal refinement in Norway.

Outside of Wacker, silicone capacity expansions also occurred with Shin-Etsu Chemical Co. Ltd., Dow Inc. and Elkem in 2022 as the upstream suppliers made investments intended to meet soaring demand.

In early March, Shin-Etsu disclosed plans to invest more than $695 million in expanding silicone production across its facilities in Japan.

The investment follows another $956 million project in 2018 to increase production capacity for silicone monomers (siloxane) at two plants in Japan and Thailand by about 1.5 times.

In May, Dow announced an increase in its global silicone capabilities to meet changing mobility demands.

The Midland, Mich.-based company identified several expansion projects for 2022 within its mobility science sector, which provides silicone solutions to the automotive and transportation industry.

This includes support for moldable optical silicone technologies for both automotive and industrial lighting applications at its Jincheon, South Korea, site. Other investments target operations in Midland and Songjiang and Zhangjiagang, China.

And toward the end of the year, Elkem Silicones USA Corp. said its new, 18,000-sq.-ft. silicone manufacturing facility in York, S.C.—a half-mile away from another Elkem silicone production plant—will open the firm up a potential $300 million market in medical silicones.

The "low double-digit millions of dollars" facility, which employs 16 and began operations in September, will produce high-purity silicone materials that meet the strict thresholds of the medical market.

For chemical companies, the path to sustainability is traveled in steps, with one innovation typically leading to another.

And at the May 10-11 International Silicone Conference in Cuyahoga Falls, Ohio, silicones showed that they can contribute to a greener planet.

"Silicones exhibit high energy efficiency and energy contribution, particularly in fuel savings, increased electrical insulation and efficiency in buildings," said Alexandra Rinehart, product steward and regulatory manager at Shin-Etsu Silicones of America. "They are also a significant contributor to product longevity as they can withstand harsh weather conditions and temperatures and tout high durability."

In recent years, concerns surrounding the greenhouse gas emissions of silicone product manufacturing and the toxicity of the material have arisen.

These concerns, Rinehart contends, are unfounded, especially when considering that there are zero restrictions on the use of silicone materials anywhere in the world outside of Europe.

Moreover, she said, the silicone industry's CO2 footprint becomes less invasive when a product's life cycle is considered.