In 2021, the global silicone market will see a situation of tight supply, soaring prices and escalating demand. By the end of the year, the production capacity and production of methyl siloxane in China will exceed 60% of the global total, and the consumption will exceed 50% of the global total. , and is still in the stage of rapid development. It is estimated that by the end of the "14th Five-Year Plan", the production capacity of organic silicon monomers in China will exceed 6 million tons per year, accounting for more than 70% of the global production capacity of organic silicon methyl monomers. However, from the analysis of the import and export status of siloxanes in the primary form in China, high-end silicone products still rely on imports, and the phenomenon of big but not strong still exists.
In recent years, the upstream market of organic silicon has been in short supply, and the price fluctuates greatly, which has a great impact on the downstream industry. With the growth of production capacity, it can not only meet the urgent needs of various industries for silicone products, but also promote the silicone industry to become bigger and stronger. Silicone refers to a large class of compounds that contain carbon-silicon bonds and at least one organic group is directly connected to silicon atoms. Among them, polysiloxanes with silicon-oxygen bonds as the skeleton account for more than 90% of the total amount. , In a narrow sense, organic silicon materials mainly refer to polysiloxanes. Polysiloxane downstream products generally include silicone rubber, silicone oil, and silicone resin, of which silicone rubber can be divided into high temperature glue, room temperature glue, and liquid glue. Silicone has a wide range of end uses, such as construction engineering, textiles, electronics, transportation, petrochemicals, aerospace, new energy, medical machinery, daily chemicals, personal care, etc.
"I think a lot of people in the industry are trying to attribute the latest round of silicone sealing to the 'COVID effect,' when it's really still a capacity issue," said Erick Sharp, president and CEO of Ace Products and Consulting LLC, Ohio. Rubber industry laboratory, testing and consulting firm in Ravenna, State. "It will be an ongoing tension until upstream capacity is created to support high-end and commodity markets."
Scott Kearns, principal partner of ElastaPro Silicone Sheeting LLC, based in Santa Fe Springs, Calif., a mid-market consumer and processor of silicones, agreed that supply chain issues and rising prices from major upstream suppliers "have been a major source of silicon problems." Key issues for the rubber industry have been dealt with in 2021."
"While silicon metal price increases have finally eased, we're seeing some consensus on price from most suppliers," Kearns told Rubber News. "That said, North American demand for silicone rubber continues to outstrip production from North American silicone rubber suppliers as these suppliers either compete for critical raw materials or reallocate assets to products with better economics."
Since Asia is the leading region for LSR and HCR, more than half of the world's silicones are currently used in the Asia-Pacific region, while China consumes the most silicone and its metal monomer products, and its trend tends to reach North America within a few months.
In Asia, the average price of silicone rose by more than 50% year-on-year in November last year and by more than 25% year-on-year from February 2020.
Experts say these peaks will continue until capital expansion is complete, with the largest producers including Dow, Wacker Chemical Co., Momentive, Aiken and Shin-Etsu Chemical Co. creating more monomer capacity.
According to IMARC Group, an India-based Sheridan, Wyoming-based consulting firm, the global silicone market will become a $15 billion industry in 2020.
The company expects a compound annual growth rate of 7.7% from 2021 to 2026, driven in part by the increased use of HCR and LSR in the electric vehicle industry and in the medical and aerospace sectors.
1. Optimism
Similar to 2017-2018, nothing will affect the silicone market in 2022. The current market volatility has multiple culprits and requires multiple solutions.
First, according to silicone market experts, demand has not diminished since 2017 — a boon for the industry if demand can be met.
But amid today's "perfect storm" of supply-line disruption and price challenges, experts say there are plenty of reasons to be optimistic about 2022 coming.
"The current supply situation is driven by the market catching up after a sharp nine-month slowdown, while silicone producers grapple with shortages of personnel, equipment and critical ancillary products," Kearns said. ". "All of this adds up to a perfect storm of tight supply.
"It's not a single silicone producer problem, it's a global problem that affects all silicone suppliers as demand goes up, costs go up and they're catching up."
Demand is expected to grow in the new year given that the construction industry is expected to grow significantly. "Silicone is a popular choice for gaskets in commercial infrastructure," Sharp told The Rubber News in early 2021, noting that the Infrastructure Investment and Jobs Act "will accelerate that demand very quickly."
Looking ahead, IMARC Group expects moderate growth in the global silicone market over the next five years, with a market volume expected to reach 2.9 million metric tons by 2025
The global silicone industry could reach $23 billion to $24 billion by 2025. With this, all is not gloom and doom, as the silicone industry has very strong growth potential.
The market will adjust itself, the question is when and at what price. Covid-19 demand levels are “not significantly higher than pre-COVID-19 (demand for medical elastomers).” A key for manufacturers heading into 2022 is maintaining a multi-vendor philosophy so that the market downturn is not as severe ; and maintain a backlog where appropriate to meet customer demand. Despite issues that negatively impact the industry, silicone rubber remains the general-purpose elastomer specified by most industrial and medical designers, and is often the only elastomer capable of meeting critical applications.
2. Increased medical use
Silicone materials are valued for their biocompatibility and inertness, so their applications in the medical field are rapidly expanding. In November, DuPont expanded its Liveo brand of healthcare-specific high-performance materials with the launch of a new line of one-piece silicone stoppers and catheters that will be available in the biopharmaceutical industry in January 2022. DuPont Pharmaceutical Caps are made of biomedical grade silicone rubber and are designed to seal threaded glass and plastic bottles in containers for critical fluid transfer, sample collection, storage and other applications. The Liveo family also includes an extensive portfolio of overmolded components for biopharmaceutical processing applications. They include an integral silicone rubber seal with high-purity platinum silicone rubber tubing. Silicone tubing is available in 50, 65 and 80 durometers and comes with a silicone tubing seal assembly. Stoppers and tubes can also be used for critical vaccines or medicines.
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