Fairlawn, Ohio – The outlook for silicones looks good in the coming years – at least that’s what one analyst is forecasting.
Kent Furst, an industry analyst with the Freedonia Group, spoke at the International Silicone Conference about how major economic trends have affected silicones in the US. Overall, the outlook seems pretty positive, with the ongoing recovery in construction and projected growth in medical leading the way over the next decade.
“Overall the US silicones market is back in growth mode, having recovered from the great recession,” Furst said. “Over the next decade, we are expecting overall demand in silicones to rise in line with the US economy.”
Furst touched upon many industries and factors in his talk, including:
The reshoring trend. Furst said this is overblown to some extent, and it is likely that manufacturing activity will grow slowly going forward;
Competition from silicones in China is still minimal. Furst said the US still has a substantial quality advantage;
Recent growth in the motor vehicle industry will not last, but Furst said silicones will have the opportunity to penetrate new applications in the automotive market;
Construction is finally seeing a recovery across all segments, but Furst said it will remain below peek levels for some time;
Current low oil prices are likely to rebound over the next decade, but Furst said overall oil prices have a limited affect on silicones in any case;
Medical will continue to be the fastest growing outlet for silicone;
Regulation and reformulation may be on the horizon for personal care silicones; and
Competing trends of commoditisation, specialisation, competition and globalisation will continue to be important in the industry.