As those factors played out through the year, it reached the point for scheduled maintenance shutdowns, he said. While some shutdowns were able to be opted out of, the fear of another catastrophe pushed others through. Continuous growth was still happening across silicone markets worldwide.
"Leading into all of these events, we were probably hitting about 75 percent capacity of what was out there in the market at that time," Sharp said. "When you hit 75 percent, and you see that you're on continuous growth, and there's no reason to assume there's going to be any plateauing or dropping off, you know you're going to tap out and you're going to need to add capacity at some point."
As the year went on, capital expansion announcements began to show up from several silicone suppliers, but most left details vague, Sharp said.
"This is September 2018, so it's still a hot time. People were still freaking out about supply," Sharp said. "It basically says, 'We're going to add capacity. We don't know where. We don't know what. We don't know how much. We don't know when. But we want to let you guys know that capacity's coming, so everybody doesn't get a little bit crazy and go out there and start switching away from silicone to other things.' "
Capacity announcements were meant to help stabilize the market to hold over customers struggling under the reductions, Sharp said. Some specified upstream production, meaning an increase in monomer production, where increases in downstream capacity meant a wider range of products once more silicone monomer became available.
Dow announced an expansion to invest both in upstream and downstream production. Currently, the only official announcement for upstream monomer production has been at Dow's Chinese operations.
"Right now, there hasn't been anything upstream announced for North America yet, but there has been downstream infrastructure improvements announced here in North America," he said. "There's probably still going to be more to come with these announcements, but these are what's out there right now."
Wacker Chemie A.G.'s initial announcement was also vague, that the company would be adding silicone without naming the continent where the supply would be added. In later releases, Wacker said downstream improvements would be taking place at its Adrian, Mich., facility, Sharp said. Upstream improvements have been announced for China, but information is scarce other than that's where the additional volume is going to go. Monomer expansion could also be part of Wacker's Charleston, Tenn., facility that recently began making fumed silica, or its Burghausen, Germany, site where more space has opened up.
Momentive Performance Materials Inc. announced that it will be expanding its facility in China, as well as two other smaller Chinese joint ventures that continue to develop downstream production, Sharp said. Elkem Silicones said it would be expanding its product offerings.
Shin-Etsu Chemical Co. said it would be boosting its silicone output, which is to say "they're going to push the pedal to the ground a little bit harder on what they have right now," Sharp said. It has invested in downstream operations in North America, including its Akron facility, and started possible planning on upstream improvements in Japan.
Two of the local players in the silicone market, Hoshine Silicon Industry Co. Ltd. and Dongyue Group Co. Ltd., have both announced capacity increases, Sharp said. Dongyue started construction on its expansion in the first quarter of 2018.
"They actually have quite a bit of construction. They got past the planning stages, beyond putting a shovel in the ground," Sharp said. "They're the furthest along of anybody that's announced capacity expansions right now. Hoshine is still in the planning stages."
While several expansions have been announced, the details surrounding them means actual capacity changes are still some distance off, Sharp said.
He gave the example that if "Sharp Silicones" said it would be adding silicone capacity, it would take a year for planning, engineering, design, stability and setup. Then it would take another year to build the plant, and another six months to optimize the plant once it gets moving to actually get product to sell. That puts the soonest new product reaching the market between 2-3 years away.
"I over-analyze a lot of these press releases because of the wording that gets in there," he said. "But when they start saying things about how they're looking at expanding and evaluating where to put it—if they're still evaluating where to put it, they're not super far along on the engineering planning. Unless there's a shovel in the ground, you're still 2-3 years out. And there's not a whole lot of shovels in the ground right now."
Further complicating the addition of capacity are two major transitions for silicone producers, Dow and Momentive, Sharp said.
The good side of the DowDuPont merger is that when the separation completes, it could mean more focus again on the core parts of the individual businesses, he said.
"Right now, there's just so much going on and nobody knows what's going where," he said. "There's just a lot of confusion."
The downside of this part of the separation will be that the company's silicone sector, what used to be Dow Corning, will end up in different segments, as health care is going to DuPont, and regular Dow product lines will remain at Dow, Sharp said.
"The problem is that there's only two plants, and they're all going to be operating at one unit," he said. "There's now going to be more than one company that actually has the commercial and business side of those plants. It'll be interesting to see who wins and how do you manage when you have one asset but two companies that use that one asset."