The fumed silica market size was estimated at over 250 kilotons in 2020, and the market is projected to register a CAGR of over 5% during the forecast period (2021-2026).
The market was negatively impacted by COVID-19 in 2020. Construction activities and automotive manufacturing activities were on a temporary halt owing to the pandemic scenario, which had minimized the demand for additives used in the formulation of these end-user industry products such as adhesives, paints, coatings, plastics, and composites, in turn, negatively impacting the market demand for fumed silica. However, the demand for excipient, an inactive agent, and additives used in the formulation of different medicines such as paracetamol and others has led to an increase in the demand for fumed silica.
- Over the short term, the surging demand for fumed silica used in the products of the personal care segment such as toothpaste, creams, and others in the Asia-Pacific region is expected to drive the market's growth.
- The development of biogenic fumed silica and the use of precipitated silica as a substitute for fumed silica are anticipated to hinder the growth of the market studied.
- Emerging applications of fumed silica are likely to act as an opportunity in the future.
- Asia-Pacific dominated the market across the world, with the largest consumption from countries such as China and India.
Key Market Trends
Increasing Demand from the Adhesive and Sealants Segment
- In the adhesives and sealants industry, fumed silica is used to increase the product viscosity, improve anti-settling properties during storage, control the extrusion properties during the application, and impart anti-sag properties during cure. The additive can also act as a reinforcing agent to improve the physical properties, especially the tear strength of the cured sealant.
- In Europe, manufacturers of the do-it-yourself (DIY) adhesives market have switched to clear packaging, where the opaque reinforcing aids additives (waxes, clays, and calcium carbonates) used for rheology control and reinforcement of STP adhesives and sealants are being replaced by fumed silica, which closely matches its refractive index with transparent polymers.
- Treated fumed silica provides significantly more adhesive strength than the coated precipitated calcium carbonates (PCC), which are usually used for rheology control of STP and polyurethane adhesives and sealants. Compounding the benefit of lower loading, fumed silica has lower specific gravity than calcium carbonate and contributes far less to adhesive weight, which can be a benefit in applications where adhesive weight is a concern, e.g., automotive light-weighting.
- Due to the incorporation of highly dispersed fumed silica, cohesive shear strength and thermo-mechanical properties of waterborne pressure-sensitive adhesives (PSAs) observe significant improvements. Adhesive shear strength typically increases more than a thousand-fold compared to the films without particle reinforcement.
- The automotive industry is one of the major consumers of adhesive and sealants. The applications include sealing heat exchanger tubes, gearbox and sump cover gasketing, bonding interior dashboard, and others. Moreover, in 2020, the global automotive production was about 77.62 million units, which declined by 15.8% compared to 92.18 million units of 2019. The declining automotive industry is likely to affect the demand for adhesive and sealants, which in turn would negatively impact the market growth of fumed silica.
- Adhesives and sealants also find their application in the construction industry, where they can be used for carpet layment, countertop lamination, drywall lamination, ceramic tile adhesion, air conditioning setup, and others. In 2019, the total value of new construction put in place was about USD 1,365 billion in the United States and reached about USD 1,430 billion in 2020, with a growth rate of about 4.5%, which has stimulated the consumption of adhesives and sealants. This has enhanced the demand for the market studied.
- Furthermore, the UK monthly construction output decreased by 2.9% in December 2020 compared with the previous month, decreasing to about USD 18.76 billion, registering a first monthly decline in growth since the unprecedented fall of 40.7% in April 2020 due to the pandemic hit, thus, impacting the demand of adhesives and sealants and affecting the market demand in the short-term.
- However, the aforementioned factors are expected to show a significant impact on the market in the coming years.
Asia-Pacific Region to Dominate the Demand
- Asia-Pacific dominated the market with a share of more than 45%, with the largest consumption taking place in countries such as China and India.
- China contributes to more than 50% of the total share of Asia-Pacific in the adhesives and sealants market. The country is also the largest producer of paints and coatings in the Asia-Pacific region.
- Fumed silica is used in many demanding adhesive applications, from building, construction, and automotive to packaging. Huge demand in the adhesives and sealants sector is expected to drive the country's fumed silica market.
- In the construction industry, fumed silica is used in adhesives, sealants, coatings, and plastics. The gross domestic product (GDP) from construction in China increased to USD 1128.07 billion in the fourth quarter of 2020 from USD 749.78 billion in the third quarter of 2020, with a growth rate of about 33%, which, in turn, stimulates the demand in the studied market.
- Adhesives, sealants, paints, and coatings are also finding their application in the automotive industry. China is the leading producer of vehicles with a total production volume of 25.75 million vehicles as of 2019 and reached 25.23 million vehicles by the end of 2020, registering a decline rate of about 2%, thereby witnessing a decrease in the consumption of adhesives, sealants, paints, and coatings.
- The total new construction in Japan was accounted for about 127.55 million square meters in 2019 and reached about 113.74 million square meters in 2020, with a decline rate of about 10.5%. Thus, this led to a decrease in the consumption of adhesives and sealants, thus, affecting the market demand in the country.
- Furthermore, in India, the pharmaceutical industry is the major consumer of fumed silica, where it is used as a high purity excipient and multi-functional additive. The country is the largest provider of generic drugs globally, with 40% of generic demand in the United States and 25% of all medicine in the United Kingdom. According to the India Brand Equity Foundation, the domestic pharmaceutical market turnover reached USD 20.03 billion in 2019, with a growth rate of 9.8% year on year, and the industry in the country is expected to reach USD 100 billion by 2025, which is expected to stimulate the demand for the fumed silica market in the country.
- Moreover, according to the Department of Industrial Policy and Promotion (DIPP) data, the drugs and pharmaceuticals sector attracted cumulative FDI inflows. This is expected to offer enormous opportunities to the pharmaceutical sector in the country, thereby increasing the use of fumed silica in the particular sector
- All such aforementioned factors are expected to increase the demand for fumed silica in the Asia-Pacific region over the forecast period.
The fumed silica market is majorly consolidated in nature, with the top five players accounting for a significant share in terms of production capacities. The major companies include Evonik Industries AG, Cabot Corporation, Wacker Chemie AG, Tokuyama Corporation, and OCI COMPANY Ltd, among others.
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