Liquid Silicone Rubber (LSR) Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The liquid silicone rubber market is projected to register a CAGR of over 6% during the forecast period (2021-2026).

The market was negatively impacted due to COVID-19 in 2020. The disruption in the global supply chain coupled with reduced demand from various end-user industries has negatively impacted the demand for liquid silicone rubber (LSR). The automotive industry may act as a barrier to the growth of the market studied. The global automotive industry witnessed a decline in sales in 2020, which was approximately 78 million units, much lower than the 90.4 million units sold in 2019. This, in turn, has affected the liquid silicone rubber market. However, the condition is expected to recover in 2021, which will restore the market's growth trajectory over the forecast period.

Key Highlights

• Over the short term, the major factors driving the growth of the market studied are increasing demand from the medical devices industry and the food packaging industry.
• On the flip side, the slowdown in automotive production is likely to hinder market growth in the coming years.
• Increasing adoption in the electronics sector is likely to create opportunities for the market in the coming years.
• The Asia-Pacific region is expected to dominate the market. North America is likely to witness the highest CAGR during the forecast period.

Key Market Trends

Increasing Demand from Healthcare and Medical Devices

• Medical devices are one of the major end-users of the liquid silicone rubber market. Owing to its purity, chemical, physical resistance, flexibility, and sterilization properties, the demand for liquid silicone rubber is on the rise in the medical devices industry.
• Currently, liquid silicone rubber has its application in medical cables, medical textile coatings, respiratory masks, medical tubing, catheters, and other medical devices markets.
• The Chinese government has increased its focus on biomedical and high-end medical device manufacturing under the “Made in China 2025” plan. This plan intends to raise the domestic content of core components and materials to 40% by 2020 and 70% by 2025. This is expected to boost the demand for liquid silicone rubber.
• The Asia-Pacific region is expected to be the fastest-growing market for medical devices. This is fueled by the increasing public expenditure on health in countries like India and Bangladesh and ASEAN countries. Furthermore, the rise in insurance coverage in the area gives impetus to the tertiary healthcare facilities in the region. This is expected to increase medical device production.
• According to the SelectUSA, a program by The International Trade Administration (ITA), US Department of Commerce, the medical devices market in the United States is the largest medical devices market in the world, and it is valued at USD 156 billion. It is estimated to reach USD 208 billion by 2023.
• Owing to all the aforementioned factors, the market for liquid silicone rubber is likely to grow during the forecast period.

Asia-Pacific Region to Dominate the Market

• The Asia-Pacific region accounted for the largest share of the regional market for liquid silicone rubber. Owing to the presence of the largest consuming countries such as China and India, the demand for liquid silicone rubber in the region is growing at a significant rate.
• According to the Organisation Internationale des Constructeurs d'Automobiles (OICA), China is the largest producer of automobiles in the world. However, automotive production in the country has been witnessing a huge decline for the past three years. The country produced 2,57,20,665 vehicles in 2019. In 2020, the country produced 25,225,242 vehicles, which declined about 2% from 2019. Thus, the demand for liquid silicone rubber is expected to remain weak in the automotive sector.
• However, the Chinese government’s push to encourage sales in electric vehicles is expected to push the demand for liquid silicone rubber in the country during the forecast period.
• China’s economy is slowly moving from an investment-driven economy to a consumption-driven economy. This is on the back of increasing consumption from the lower-tier cities in the country. This is expected to increase the demand for consumer goods, like child-care products, etc. This has been driving the demand for liquid silicone rubber in the country.
• China is the largest base for electronics production in the world. Electronic products, such as smartphones, TVs, wires, cables, portable computing devices, gaming systems, and other personal electronic devices, recorded the electronics segment's highest growth. In China, with the increase in the disposable income of the middle-class population and the rising demand for electronic products, countries are importing electronic products from China.
• China is the world's second-largest cosmetics market and emerging as the largest market in terms of cosmetics and skincare products globally. The Chinese cosmetics and skincare market, which includes a wide variety of industries, such as makeup, skincare, haircare, and personal hygiene, experienced growth in 2019-2020. Furthermore, the continuous growth in population is another factor fueling the demand for cosmetics products in the country. This, in turn, is augmenting the growth of the market studied.
• According to IBEF, during the period of April 2019-January 2020, Indian exports of cosmetics and toiletries increased by 5.62% to USD 1,444.15 million.
• The medical devices market in India is likely to reach USD 11 billion by 2022, and it is further estimated that the market is likely to reach USD 50 billion by 2025, which is supported by the increasing geriatric population, rise in medical tourism, and falling cost of medical services.
• All these factors are expected to show an impact on the liquid silicone rubber market in the region during the forecast period.

Competitive Landscape

The liquid silicone rubber market is partially consolidated in nature. Some of the major players in the market include Dow, Wacker Chemie AG, Shin-Etsu Chemical Co. Ltd, KCC SILICONE CORPORATION, and Jiangsu Tianchen New Materials Co. Ltd, among others.

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• The market estimate (ME) sheet in Excel format
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