The Global Silicone Market was valued at USD 15,250.85 million in 2020, and the market is projected to register a CAGR of over 6% during the forecast period (2021-2026).
The COVID-19 pandemic has hampered the silicone market. Due to nationwide lockdowns, strict social distancing, and disruption in the global supply chain, most factories and industries were completely shut down globally, which negatively impacted the building and construction, thus declining the demand for silicone. However, the rise in demand from the healthcare, personal care, and consumer products sector due to increasing awareness for health and hygiene has stimulated the demand for silicone.
- Over the medium term, the major factors driving the silicone market's growth are the increasing demand from the construction and electronics industries.
- On the flip side, the adverse health impact of silicone is likely to hinder the growth of the silicone market.
- Rising awareness and use of liquid silicon rubber in manufacturing is likely to be an opportunity for the silicone market over the forecast period.
- Asia-Pacific is expected to dominate the market among other regions, supported by the growing construction industry in the region.
Key Market Trends
Increasing Usage in the Construction Industry
- In the construction industry, silicones are used in structural glazing and weatherproofing while contributing to the energy efficiency of the buildings. They also help improve in-shop productivity, reduce material waste, extend building life, and reduce lifecycle costs.
- Additionally, silicones are used to seal joints and openings in various applications in construction (including attaching glass, metal, or other panel materials) in a building's metal framing system, roofing, flashing penetrations and terminations, building material expansion joints, and interior perimeters of doors, and baseboards and moldings.
- They are also extensively used in do-it-yourself (DIY) applications in sealants for joints in paving, decks, and concrete slabs. The level of silicone used in the sealant products is high, and silicone forms an essential part of the formulation. Silicone sealants have a paste-like consistency and are generally poured into the joint or applied with a caulking gun.
- The Asia-Pacific and North American regions have been witnessing strong growth in the residential construction sector. Asia-Pacific has dominated the construction sector with the growth in countries such as India, China, the Philippines, Vietnam, and Indonesia. Besides, in North America, high housing demand due to the growing population and increased immigrants and the trend of nuclear families are some factors driving the region's residential construction.
- Asia-Pacific has the largest low-cost housing construction segment, led by China, India, and various Southeast Asian countries. In India, the government initiated the project 'Housing for All by 2022', which is expected to drive the country's residential construction segment.
- According to the US Census Bureau, the number of new privately-owned housing units under construction was 11,471 thousand units in 2019. In 2020, by March 2020, the number of housing units reached 3,642 units. Moreover, according to The Federal National Mortgage Association (Fannie Mae), housing starts were expected to jump 10% across 2020, with 1 million new homes hitting the market by 2021.
- Due to all the aforementioned factors, the market is expected to witness a strong growth post-recovery during the forecast period.
The Asia-Pacific Region to Dominate the Market
- Asia-Pacific is the major consumer of silicone, accounting for the largest share. The growing market in China and India has been one of the prominent reasons for the growth of the Asia-Pacific silicone market over the years.
- China is amid a construction mega-boom. The country has the largest building market in the world, making up 20% of all construction investment globally. The country alone is expected to spend nearly USD 13 trillion on buildings by 2030.
- The Indian construction industry is expected to slow down in 2020-2021 due to the COVID-19 pandemic. Still, most projects in the commercial space are likely to continue even during this period, as they are either public-private partnerships (like a smart city) or public projects, which are already budgeted for. However, in the long run, the sector is expected to record a high growth rate.
- Although demand for the construction industry is looking good, the automotive sector in the country is slowing down with a decrease in market demand. After steady growth for over a decade, the automobile industry in the country saw a decline in 2019 due to multiple factors, like teething issues with goods and service tax (GST), credit crisis, and demand shock due to the economic slowdown. Automobile production declined by around 25% in 2020 compared to 2019, according to OICA.
- The construction industry in ASEAN countries and India represents one of the fastest-growing markets and is anticipated to account for a major share in the global construction market. Countries, such as Indonesia, Singapore, Thailand, Vietnam, the Philippines, and India, have been witnessing robust growth in construction activities in the Asia-Pacific region.
- The factors mentioned above contribute to the increasing demand for the silicone market in the region during the forecast period.
The silicone market is consolidated, with the majority of the share accounted for by key players. Some of the market's major players include Wacker Chemie AG, Dow, Elkem ASA, Momentive, Shin-Etsu Chemical Co. Ltd, and Evonik Industries AG.
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