In the first half of 2021, there was a situation of tight supply, soaring prices and escalating demand in the global silicone market. Especially in North America, the demand of suppliers continued to exceed the production capacity.






The situation in the second half of the year is not much better. There are more and more challenges in the supply line. Inflation, force majeure and upstream suppliers choose to maximize the cost market rather than increase production capacity exacerbate this challenge.






Eric sharp, President and CEO of ACE products and Consulting LLC, said: "I think many people in the industry are trying to attribute the latest round of silicone rise to the 'covid effect', but in fact, it is still a capacity problem." Rubber industry laboratory, testing and consulting company in Ravenna, Ohio. "This will be a continuous tension until upstream capacity is created to support high-end and commodity markets."


Elastapro silicone sheeting LLC, located in Santa Fe Springs, California, is a middle market silicone consumer and processor. Its main partner Scott Kearns agreed that the supply chain problem and the price rise of major upstream suppliers "have always been a key problem in the silicone rubber industry and have been dealt with in 2021."


Kearns told rubber news: "although the price rise of metallic silicon finally eased, we see that most suppliers have reached some consensus on prices.". "In other words, the demand for silicone rubber in North America continues to exceed the production of silicone rubber suppliers in North America, because these suppliers are either competing for key raw materials or reallocating assets to products with better economic benefits."






As Asia is the leader of LSR and HCR, more than half of the world's silicone is used in the Asia Pacific region, while China consumes the most silicone and its metal silicon products, and its trend often reaches North America within a few months.






In Asia, the average price of silicone increased by more than 50% year-on-year in November last year and more than 25% year-on-year from February 2020.






Experts said that these peaks will continue until the capital expansion is completed, and the largest producers including Dow, Wacker chemical, Momentive, Eken and shinyue Chemical Co., Ltd. will create more monomer capacity.






According to imarc group, a consulting firm headquartered in India and Sheridan, Wyoming, the global silicone market will become an industry worth US $15 billion in 2020.


The company expects a combined annual growth rate of 7.7% from 2021 to 2026, partly due to the increased use of HCR and LSR in the electric vehicle industry and in the medical and aerospace fields.