Global Silicones Market Outlook

The global silicones market has surplus capacity with more than half of the capacity concentrated in North America and Europe. The overall demand is expected to grow at 4.5 percent CAGR, to reach 2.5 million MT by 2022.The market faced several production issues during 2017, which are likely to continue in 2018 – 2019

The silicones industry is undergoing technological and product innovations across all regions driven by strong downstream growth especially due to the advancements in the healthcare and energy sectors. Silicone capacity concentration is gradually shifting towards APAC owing to its strong regional demand growth in the world

silicones-global-market-size

Demand Market Outlook

  • Increasing demand of silicones for polyurethane-based product manufacturing in the construction and automotive sectors especially in developing regions like China, India, LATAM, etc., and also due to rising infrastructural growth and increasing auto sales is expected to drive the demand for silicones in the upcoming years 
  • Demand from the US and Europe is expected to grow from the healthcare and medical applications and lightweight silicone applications in transportation and renewable energy sectors in the future

Industry Best Practice

Engagement models

  • Buyers in North America prefer contract pricing, as they are engaged in domestic sourcing of silicones. While it is partly spot and partly contract in Europe, spot pricing is the buyers’ preference in APAC

Contract structures

Fixed Contract 

  • Length of contract: One year on average 
  • Volume in contract : >1,000 MT/year

Multi Year Contract

  • Length of contract: 2–3 years (to establish long-term relationship in a highly matured market)

CPG Buyers’ Preference

CPG players opt for domestic sourcing of silicones for their small volume procurement. Large volume buyers prefer engaging with global suppliers based out of the US or Europe owing to their surplus domestic capacities

Global Market Size-Silicones

  • APAC countries are expected to have high demand growth rates for silicones until 2022 driven by electronics, construction, and automobile sectors.
  • Demand growth for silicones in North America and Europe will come from healthcare applications like aesthetic implants and renewable energy sectors like windmill and solar applications