Dow leader sees brighter prospects for silicones in 2024
13 Feb 2024
Key end-use markets on the up, feedstock supply starting "to tighten a bit in China..."
Midland, Michigan - Dow Chemical has reported a general slump in the performance of its Performance Materials & Coatings (PM&C) segment, which includes silicones, in 2023.
Pricing pressure on silicones was a contributory factor to a decline at PM&C, which saw 2023 net sales fall 21% to $8,497 million and earnings (operating EBIT) down more than six-fold to $219 million.
Feedstocks such as siloxanes and related monomers "were both oversupplied,” said Dow chair & CEO James Fitterling. “That put pressure obviously on both volume and pricing in the [fourth] quarter.”
“Volumes decreased sequentially across all regions in all markets,” continued Fitterling, adding that “silicones were a little bit softer” than expected in the fourth quarter
“Year-over-year, they were down on price, because of supply-demand for both siloxane and monomers,” he added.
Nevertheless, Dow’s leader was upbeat regarding prospects for the group’s silicones and related feedstock businesses this year.
“We are keeping an eye on what is happening with EV volume production [which] drives a lot of silicone-content, a lot into batteries,” said Fitterling.
“But the other segments in silicones are also on pretty substantial growth for 2024,” the US group’s chair & CEO further commented.
In the upstream monomers markets, he added, “I think things will start to tighten up a bit in China: “The amount of siloxanes capacity that's coming on in 2024 versus what came on in 2023, it's down quite a bit.
“Downstream markets have been continuing to grow, and we've been continuing to invest in debottlenecking. It's just the amount of upstream that's come on has added to that.
Fitterling went on to give an upbeat assessment of high-volume markets for silicones, helped by an uptick in construction activity, strong EV sales and growth in E&E telecoms, consumer goods and personal care markets.
“So I'm optimistic, maybe it may take more until '24 and into '25 to see it. But I do feel like we're going to start to move toward mid-cycle in 2025,” concluded Fitterling.
