US Silicone Demand to Reach $3.6 Billion in 2014

US demand for silicones is forecast to advance 5.3 percent per year to $3.6 billion in 2014.  Gains will represent a strong acceleration from the 2004-2009 period, fueled by a rebound in manufacturing activity and construction spending, which will rise from a 2009 base depressed by an economic recession.  Consumer goods such as cosmetics and toiletries will remain a fast-growing market for silicones, as will medical products.  However, more sluggish growth in areas such as automotive polishes and textile coatings will limit further gains in demand.  As silicones become an increasingly mature product, and competition with other materials intensifies, technological advancements and product innovation will become essential to grow the application base.  These and other trends, including market share and product segmentation, are presented in Silicones, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Silicone fluids were the leading product type in 2009, accounting for over 40 percent of the market.  However, demand for silicone fluids will rise at a below-average pace through 2014, limited by slow growth in applications such as vehicle polishes, pulp and paper defoamers and urethane additives.  Stronger gains are expected for elastomers and resins, buoyed by a turnaround in key markets, including motor vehicles, machinery and construction.  The fastest gains, however, are expected for silicone gels, driven by robust growth in demand for gel encapsulants in LED and photovoltaic applications.

Industrial markets will remain the dominant outlet for silicone through 2014, accounting for a majority of total demand.  After an overall decline in silicone sales between 1999 and 2009, a rebound in manufacturing activity will spur healthy increases in industrial markets for silicone.  Motor vehicles -- rising from a severely depressed 2009 base -- and machinery will be the fastest-growing industrial outlets.  Among other markets, construction and medical products will also see strong increases in demand.  Medical markets have historically been a growth area for silicone, and the increased use of silicone gel-filled breast implants will stimulate even stronger gains.  The construction market will benefit from a bounceback in construction activity and the rising use of high-performance silicone-based adhesives, sealants and coatings.  Gains in consumer markets will modestly lag the overall average, however, limited by weakness in demand for silicone-based motor vehicle polishes.

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.