AKRON—Tightness in silicone supply is straining the market, bringing on higher prices and causing trouble for steady sources, with no relief in sight until at least 2019, industry insiders said.
"Lead times have certainly increased, by several weeks in some cases, and there are a few grades which have become more difficult to come by, but we're proactively managing these with our vendors as well as our customers," Zack Beier, director of purchasing at Q Holding Co., which manufactures silicone products for the automotive, medical and aerospace industries, said in an email.
For Erick Sharp, president and CEO of Ace Products and Consulting L.L.C., customers who use silicone are contacting him both to get a feel for the market and to try to find alternatives to get past their own supply woes, he said.
"Some of them are in more critical places, and some of them are just trying to be pre-emptive, because they're seeing what's going on out there. They're seeing if it's legit and how long it's going to last," he said.
The shortage started to become more visible within the past year, as silicone facilities worldwide have fallen behind necessary demand, said Alex Sechi, senior account manager, Americas, for BRB International B.V., a formulator and producer of silicones.
"What we see is that it's really a supply/demand issue," Sechi said. "The demand has increased all over the world. If you look at the economic news, all countries are doing well and growing again. … The output of the plants for global capacity is not what it was in the past, plus the demand is growing, which is creating a gap."
For Greg Heden, marketing manager of First Continental International, which distributes chemicals and other raw materials directly from mostly Chinese manufacturers, silicones have been its largest expanding area for the past couple of years. The chemicals distributor works with several silicone manufacturers in China, but doesn't disclose its sources, though customers are able to approve and qualify materials.
Global demand for silicone is high in all regions, not just China or North America, said Eric Bishop, North America marketing manager for Shin-Etsu Silicones of America.
Silicone demand in 2017 saw one of its strongest years since the recession, according to Kent Furst, manager, polymers and materials, at Freedonia Group.
"The end consumer is starting to have trouble getting material now," Sharp said. "They're asking customers for more, and that volume's getting restricted down, and some people can't even get the level they were getting."
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