Consultant: LSR the fastest-growing among the four main silicones

Cleveland —​ Demand for silicones is expected to grow significantly through 2024, and liquid silicone rubber is a big part of that growth.

Patrick Ellis, associate consultant with Smithers Rapra, said in a presentation at the 2018 U.S. Silicone Elastomers/TPE summit, held June 27-28 in Cleveland, that total capacity is projected to grow by about 100,000 metric tons to 500,000 by the end of 2024.

The global industry is projected for 6.1 percent compound annual growth during that same period, with Asia-Pacific well ahead of everyone else, gaining an extra 4 percent of market share. While other regions are shrinking in market share, Ellis said they are still projected to grow through 2024.

Medical, food and hygiene are projected to grow about 3.1 percent during that time period.

"Silicone elastomers were made in heaven for the medical industry," Ellis said.

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Silicone elastomers have two significant advantages compared to thermoplastic elastomers — their high heat resistance and superb compression sets. Ellis said, however, that silicones combined with appropriate thermoplastics are the future of the industry, allowing these new compounds to achieve the best of both segments.

Ellis said there are plenty of opportunities going forward throughout all industries. The migration to electric vehicles presents an opportunity for silicones to be used in unique ways to conserve and more efficiently utilize energy throughout the vehicle. They also have applications in lighting — both in automotive and nonautomotive industries — electronics and medical, specifically developing stronger vial stoppers.

Regulatory changes, like the new Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulations that went into effect this year, also open opportunities.

"Silicone elastomers are absolutely at the top of the pinnacle in their ability to comply with REACH regulations," Ellis said. "I know Americans and Asians here today are thinking REACH doesn't have anything to do with them, but without conformity to REACH regulations, you cannot export to Europe. And the Europeans can't export unless they have REACH regulation compliance."

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Ellis said LSR is the fastest-growing among the four main silicones — high-consistency rubber and both types of room temperature vulcanizing compounds. HCR is projected to lose about 5 percent of the market, while LSR is projected to gain that same amount through to 2024.

"It's a unique process," Ellis said of LSR. "No other process uses this kind of liquid injection molding system. I believe there is room for other materials to use this process. Everything grows on everything else; nothing is new under the sun."

Yanmin Lee, president and CEO of Shenzhen Square Silicone Co. Ltd., said in a later presentation that China has become the fastest-growing single market in both production and consumption of LSR.

According to Lee, the market has grown to 30,000 tons in 2017, with domestic consumption accounting for anywhere from 25,000-28,000 tons — the remainder exported to other Asian countries, Europe or America.

"The consumer market of LSR is shifting from Western countries to emerging countries represented by China," he said. "As the world's factory, China turns more and more LSR into products and sells them to the global market."

However, this growth hasn't been without its bumps. The 2008 recession caused global LSR demand to shrink. And China's environmental protection directives in 2016 caused a shortage of siloxane, exposing the imbalance of supply and demand. Prices for siloxane soared by about 150 percent, according to Lee, causing LSR prices to increase by 50 percent through June 2018.

While China has plenty of growth potential, Lee said the country is still catching up on building brands for LSR products.

"This requires consistent innovation, closing the gap with advanced technology," he said. "Strengthening quality management, providing consistent quality and better customer service. And take responsibilities in environmental protection, production safety and occupational health."