Cleveland, Ohio – The silicones industry is set for a relatively fast recovery from the Covid-19 downturn, according to US market analyst Kent Furst.
According to Furst, the silicone market is expected to be hit harder than the overall GDP decline of 6-7% in the US, however it also is expected to rebound more quickly.
"A strong rebound in the coming years is expected," Furst said. "It is expected that we will regain the ground we lost in 2020 by 2021," said the manager of polymers and materials at The Freedonia Group Inc., a market forecasting firm Freedonia Group in a 10 Nov presentation.
"And the industry should rise above the high water marks in 2017-18 by 2022 or 2023," said Furst speaking at the online International Silicone Conference, held 10-12 Nov.
According to the analyst, demand fell during the great recession of 2008-09, and during a period in 2016 when China exhibited weak demand for silicone products.
At the time, the industry rebounded strongly, Furst said, adding he expected it to do so again following the pandemic.
In 2008, there was a decline in the global market of about 5.5% in silicone industry sales, while the pandemic is expected to push that downturn to more than 8%.
To review the chaos of 2020 through the lens of the silicone market shows a first quarter that saw weak pricing carried over from 2019, especially for commodities. The second quarter witnessed the most precipitous declines at between 15% and 25% as the full force of the pandemic took hold.
Automotive, personal care and construction all fell of the table, while medical, with its necessary PPE and ventilator projects, saw high demand for silicone products.
The third quarter saw some recovery in construction and automotive, as well as pricing somewhat firming back up with demand.
And the fourth quarter remains to be seen.
"Initially, it looks like recovery is continuing, though lock downs in Europe are still contributing to a slower recovery," Furst said.