Silicones Market Intelligence

Industry Outlook & Drivers

Global Silicones Market Analysis and Global 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.

The key demand driver for the silicones market are electronics and CPG manufacturing growth in APAC, the growing demand of healthcare applications followed by renewable energy demand in all regions. The major supply and share of the global silicone market: North America - 20 percent, Europe - 30 percent, and APAC - 45 percent.

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

Global Silicone Market Overview

• Volatile prices of silicon metal influence the silicone market price as it is the primary feedstock in silicone production. The other feedstock is methanol which is used in methylene chloride synthesis. However, the impact of methanol prices on silicones is relatively low. While feedstock costs have a greater impact on silicone prices in North America and APAC, utility costs decide the silicone market price in Europe owing to tax levies.
•  With the top four suppliers occupying more than 50 percent of the regional market share, the north America silicones market is highly consolidated.
• Major exporters, like the US and European countries, export high quality silicones to the rest of the world.
• The US exports its surplus silicones production to supply-deficit countries like Mexico. In 2016, China was the net importer of silicones from Japan and USA, owing to the supply crunch in the region.

Why You Should Buy This Report

This silicone market report gives information about the global and regional market outlook, market size, supply-trend analysis, trade dynamics and export-import trends. It gives a broad overview of the north America silicones market, Europe silicone market, etc. and does Porter’s five force analysis for these regions. The report lists out the industry drivers and constraints, innovations, major events, etc. It does a cost structure analysis and gives insight into silicone market-based price. The report gives the global and regional capacity share of suppliers and does SWOT analysis of key players like Dow DuPont, Momentive, Wacker, etc.