11/6/10 – Silica Demand to Grow as Global Manufacturing Activity Rises
11 June 10
Specialty silica demand is forecast to rise by 6.3 percent a year in volume terms and 6.8 percent annually by volume as world manufacturing activity increases. This is the forecast in the latest report on the sector from the Freedonia group. This means that by 2014, the analysts believe that the demand for specialty silica will be 2.7 m tonnes worth an estimated US$5.8 bn.
The report states,”This pace of growth represents an acceleration from the 2004-9 period, in which silica demand was hampered by the global economic downturn. Gains will be driven by a rise in world manufacturing activity particularly in key silica markets.” Additionally the sector will beneft from rising silica use in China and India as the industrial growth in those countries continues. This is particularly in relation to their use of silica as an additive or processing aid in manufactured goods. Elsewhere the analysts believe that the gains will be limited by market maturity in the US and Western Europe in applications such as toothpaste abrasives, pesticides and refractories.
The report says that precipitated silica, 70 per cent of world demand in 2009, will remain dominant throughout the period under consideration. It will also be the fastest growing product as there will be a strong “rebound in the rubber market and increasing utilization in tyres as a partial replacement for carbon black,” note the report. Chemical applications including coatings, inks and catalysts will represent further growth areas for this type of silica.
When it comes to other types, fumed silica will be driven by a recovery in silicone rubber production, while silica sol will increase its share of the semiconductor polishing market and paper coatings.
The industry is relatively concentrated with only six companies dominating the market and accounting for 52 per cent of global demand in 2009. These are Evonik Industries, PPG Industries, WE Grace, Cabot, Rhodia and Wacker Chemie with Evonik maintaining its top positions in both precipitated and fused silica production. There is also a strong second tier of 19 companies of which Tokuyama, JM Huber, Eka Chemicals, PQ Corporation and Fuso Chemical are the largest of this group.
Regionally silica in the Asia/Pacific region is expected to experience the fastest growth in demand through to 2014 with an estimated rise of 9 percent a year that will then add up to about half of total world demand. China is already the world’s single largest market for silica and this will continue as growth there will be in double digits.
Europe and North America will are likely to have a lower than the world average growth. From a rather more modest base in 2009, demands in other regions such as Central and southern America, Eastern Europe and the Africa/Mideast region are likely to post gains moderately higher than the world average says the Freedonia report. More details on the report is available from www.freedoniagroup.com.