The silicone rubber market has a variety of applications in various fields including automotive, medical, consumer goods; sportswear etc. The supply crunch is being faced recently by the global silicone rubber market. The demand is around 780,000 MT while the supply is 680,000 MT. The highest demand is in China followed by Europe. Dow Corning, Wacker, and Momentive are the top suppliers of Silicone Rubber.
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What is Silicone Rubber?
Silicone rubber is an elastomer of silicone containing hydrogen, oxygen, and carbon. It is available as both one part and two parts polymers and has fillers in order to reduce costs and improve properties like stability, non-reactivity, and resistance to extreme temperatures. It has resistance to extreme temperatures and is stable and non-reactive. It has various applications in textiles, footwear, electronics, medical devices etc. The various properties of silicone rubber include:
- Resistance to extreme temperatures
- High wear and tear strength
- Larger elongation
- High flexibility
Silicone Rubber Market Insights and Analysis
The main reasons for supply crunch or the market being so tight are that the demand rate is increasing (10-20 %) and no significant capacity additions are available. The main reasons for this supply deficit include:
- China is becoming the production landscape for many western producers due to the low cost of production.
- The Leverkusen plant in Germany has been shut down due to which the supply of siloxane monomer is facing a shortage.
- Many silicone players had to either shut down or lower their operating rate when China conducted environment inspections in 2017 further reducing the supply of silicone rubber.
- China is the biggest producer as well as consumer of silicone rubber with 420,000 MTPA of demand. However, there are still issues regarding quality of silicone rubber.
The market in Asia-Pacific is further expected to grow with an increase in product demand of footwear, healthcare and electronic devices. The construction activities also use silicone rubber increasing the demand even more.
Top players in Silicone Rubber Market
The silicone supply market can be categorized into grade and application. The categories in grade include food, health and industrial. The application is also further categorized into automotive, consumer goods, medical and electronics. The top players of silicone rubber market are Dow Corning Corporation, Wacker Chemie AG, Shin-Etsu Chemical Co. Ltd., Elkem Group and others.
Facts about leading Silicon Suppliers:
- Wacker and Dow Corning generally dictate the price movements as they hold the maximum number of shares.
- Backward integrated to siloxanes, Momentive is another major supplier of silicone rubber. But they are not a viable source as their financial condition is weak. Further, they are struggling with a weak portfolio because of the shutting down of their siloxane plant in Leverkusen, Germany.
- Five major silicone suppliers also make a lot of intra-industry trade for siloxane monomer.
- The manufacturer backward integrated to siloxane monomer is only Shandong Dongyue in China. The backward integrated siloxane monomer supplier in Korea is KCC Basildon.
- Dow is the largest supplier of siloxane monomer along with the end-capping agent of non-integrated silicon rubber manufacturers. It has issued a control on production. It is further limiting the supply, increasing the captive consumption.
Regional analysis of silicone rubber market
China, North America, and Europe have more than 80 % downstream demand and the demand is growing rapidly with a CAGR of 10 %. In the last few years, China and India have witnessed strong market due to the presence of top players, easily available raw materials and their strong distribution networks. Further, China is the leading market for electronic devices and technology innovations which results in a significant rise in demand.
Due to technological advancements, European countries have also seen remarkable growth in the last couple of years. The market has also fuelled due to the growing demand for lightweight materials in the automobile industry. The mergers between leading companies in the U.K., Italy, Germany, and France are also set to propel the market.
The market for silicone rubber in the USA is also anticipated to grow due to a rise in expenditure on medical devices and growth in the healthcare industry.
New opportunities are expected in the silicone rubber industry in the coming years due to the installation of huge R&D facilities, advancement of technology in the medical field and growing application in the electronics industry. Companies are further focusing on mergers or joint ventures to establish a stronghold in the market.