The Waker company, a leading distributor of siloxanes, used as primary materials for producing silicon construction sealants and glues, has announced an increase of prices for their production by 10—20%. It is therefore logical that the market is expected to increase the prices for all goods containing siloxanes.
A kind of “earthquake shock” on the market was the Momentive (one of the largest producers of siloxanes) company’s announcement about the reduction of the production of siloxanes and switching over to the production of NXT-silane for the tyre production industry.
The seriousness of their intentions is proved by downsizing, closing a plant producing siloxanes in Europe and opening manufacturing facilities for NXT-silane production. Actually, the company has taken a strategic decision to switch over to servicing the automobile market, having invested $30 bln in the new production.
After this fact, analysts explain that such switching over by the insufficient marginality of the current market of silicone joint sealants for siloxane producers is due to market saturation and, indeed, pressure from the producers of cheap materials.
Considering the market on the whole, one may see that the leading producer of sealants and glues is China, manufacturing 17% of all such materials and annually increasing the production by 6—7%. The second place is occupied by the USA with 2.5%—4% annual growth. European producers then follow.
Experts consider hybrid and polyurethane sealants to be the most prospective as their improvement makes it possible to use them instead of mechanical joints.
According to information from the Association of sealants and glues’ producers, there are 60 product line groups on the Russian market (450,000 tons costing 100—110 bln roubles ($1.8—2 bln), which is 3.4% of the total volume of the world market), including 100,000 tons of sealants and 320,000—350,000 tons of glue.
Almost half of the components in this sector are light chemistry products, which are not actually produced in Russia at present, but rather imported.
There are companies on the market buying quality foreign components and adding cheap components as plasticisers while packing. The deterioration of primary material properties results in the early “ageing” of cheap sealants. For example, the silicon materials service term may decrease to 3—10 years for interior use and up to 2—3 years for exterior use.
According to data from the Scientific-Research Institute for the technical and economic survey of a chemical complex, the import of chemical components is 33—65%, depending on the product line position. Nevertheless, the share of the domestic production in the structure of the Russian market of sealants grew to 51.0% in 2016, when compared with 39.7% in 2013.
The average share of domestic companies in the structure of the Russian market of sealants has increased during recent years. More than 800 Russian companies work there, and after the decrease of production in 2015 (by 20%), a tendency appeared in 2017 of increasing production.
Sealants are used for the impaction of abutting joints and connections in construction structures, clearance deletion, joint closure, waterproofing of different spaces and assemblies, and impermeability to wind of wooden houses and framed structures’ panels, etc.
The market offers multiple types of sealants, each of which is for a definite type of material: brick, ceramic tile, painted and uncovered metal, wood, etc.
The accompanying instructions, as a rule, depict the use of a sealant in the assigned technological conditions and determine the types of working materials, and contain the list of necessary security measures.
The market of sealants will fall or at least stagnate
Top-manager of the “Korsil Trade” company, Ilya SMIRNOV, has shared his assessment of the Russian market of sealants:
— What is the share of imported construction sealants on the Russian market? Does it change?
— From my point of view, the share of import is about 95%. One might write “made in Russia” on the packaging as much as he wants, but the basic primary materials are from Europe and China. This relates to unvulcanised rubber, accelerating agents and fillers. The share does not change as there is no alternative. It may rise in the future.
— What sealants are the most demanded?
— The most demanded sealants are the cheapest, both acidic and neutral.
— What are the capacities of the Russian producers of sealants?
— The capacities are limited by the capacities of suppliers. I do not see any desire to invest in the updating of the production. The condition of the economy is not suitable.
— What might be expected on the Russian market after Momentive’s closing up the production of siloxanes and the rise of prices for this primary material by other suppliers?
— This resulted in the primary materials’ deficit. Many European plants close for maintenance, taking from two weeks to a month. These plants are focused on the local customer. Additionally, the European market grows faster than the Russian one. Big volumes are assigned for months on end.
The prices for sealants will grow by 10—20% due to the lack of primary materials, and it will now be felt in June—July, 2017.
— What are, from your standpoint, the prospects of the further development of the sealants sector on the Russian market?
— In the current condition I expect a fall, or at least a stagnation. To develop the sealant sector it is necessary to develop primary materials production in order to produce the basic components.