A new study into the global speciality silicas market has found the sector is over-supplied, but strong demand from tyres and electronics should ease the capacity glut in the next five years.
The study, carried out by US researchers MineSet Partners LLC, and published by Kline, is in six parts, covering the three main geographical regions, each analysed from two perspectives: a business analysis and manufacturing economics. The complete study costs over $110 000, but each section may be purchased separately.
The key conlusion of the report says large amounts of manufacturing capacity were built in Europe immediately prior to the economic slowdown starting in 2001, and these have remained under-utilised, leading to intense price competition in the sector. A statement from the publishers said, "Overcapacity, compounded by stiff competition from Chinese producers and the downturn in the global economy, led to a shakeout of some of the smaller suppliers of colloidal silicas, precipitated silicas, and silica gel. The larger suppliers like Grace Davison and Rhodia were able to shift their surplus among their various facilities around the world, but profits fell, and capacity utilization levels are still well below optimal in the $2500 million global specialty silicas market."
Todd Harris, MineSet's managing director, said "Most new cars in Europe are now factory-fitted with green tyres, so there's actually little room for growth in the OEM market. The key is getting silicas into replacement tyres and truck tyres, and to incorporate silicas into more of the tyre body than just the treads." The report predicts that demand for precipitated silica in tyres will grow at 4 percent per year, and claims that there are other opportunities for suppliers to sell off even more of their surplus material.
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