Silicones Procurement Intelligence Report 2026-2031

Silicones Supply-Demand Overview

In the automotive industry, the demand for silicones procurement is driven by the need for lightweight materials that enhance fuel efficiency and reduce emissions. The growth of the construction sector, particularly in emerging economies in the Asia-Pacific region, has further increased the demand for silicone-based sealants and adhesives. 

According to the silicones procurement market report, by 2030, over 40% of India's population is expected to live in urban areas, creating a demand for an additional 25 million affordable housing units. The growing electronics equipment market, fueled by the rise of consumer electronics and renewable energy technologies, has also increased the demand for category management in high-performance silicone materials.

Silicones Cost Structure

According to the silicones procurement report, the pricing models for silicones are mainly influenced by the costs of key raw materials, including methanol and other chemicals used in their production. It is derived from sand, serves as the primary base material, and its extraction and processing are energy-intensive, impacting pricing trends for buyers. The manufacturing process, which involves complex chemical reactions like the production of siloxanes (the core structure of silicones), requires substantial energy and specialized equipment.

Strategic purchasing, labor costs especially for skilled technicians and safety measures in handling chemicals also affect cost modeling. Additionally, transportation and logistics costs are important factors, as they are often produced in bulk and should be carefully shipped to various industries.

According to market research for procurement professionals, environmental and regulatory compliance costs associated with the production and disposal of byproducts are another factor impacting negotiation strategies. Finally, market dynamics, including demand from industries like automotive, electronics, and construction, also influence pricing, with increased demand potentially driving price hikes, as noted in silicones procurement report.

Silicones Pricing Trends

According to the silicones procurement report, the primary raw material used in silicone production is silicon metal, and its price plays a key role in determining pricing models. Silicon metal prices are influenced by factors such as energy costs (especially electricity, as the production process is energy-intensive), mining costs, and supply fluctuations from major producers, particularly in countries like China, Russia, and the US.

The silicones procurement market also notes that ongoing challenges in global shipping and logistics, including higher freight costs and container shortages, have contributed to increased strategic purchasing. These disruptions have impacted the availability of raw materials and finished products, driving negotiation strategies.

Silicones Procurement Best Practices

According to the silicones procurement report, practices involve selecting suppliers who can consistently provide high-quality materials while meeting cost, supply, and timing requirements. Companies often enter long-term contracts to secure stable pricing strategies, given the complexity and specialized nature of category management.

In addition to cost modeling, suppliers must comply with environmental regulations and safety standards, as the handling and transportation of silicones require following specific protocols within the silicones procurement market.

Procurement research teams also prioritize suppliers with the technical expertise to offer tailored silicone solutions for industries such as automotive, electronics, and healthcare, as outlined in the silicones procurement report. To mitigate potential supply chain risks, businesses may diversify their supplier base through strategic purchasing, ensuring a continuous material supply even during disruptions.

Key Players in the Silicones Industry

Recent Developments in the Silicones Procurement Report

• In October 2024, Elkem ASA launched a new generation of elastomers designed for additive manufacturing. The newly launched AMSil™ 20503 series is an advanced development based on tailored liquid silicone rubber (LSR) formulations. 
• In May 2024, Shin-Etsu Chemical Co., Ltd. announced its plans to establish a new company, Shin-Etsu Silicone (Pinghu) Co., Ltd., in Zhejiang Province, as well as construct a new production plant to expand its business.
• In January 2024, Wacker Chemie AG announced its plans to expand its specialties business by building a new silicones production site in Karlovy Vary in the Czech Republic. As per the silicones procurement report, the expansion is driven by the rising adoption of electromobility and renewable energy technology. Production is expected to start at the end of 2025. 
• In November 2023, Dow Chemical and Circusil partnered to commission a silicone recycling facility in Kentucky. As per the silicones procurement report, the facility will recycle silicone waste streams from Dow’s operations in the United States as well as postindustrial waste streams from buyers. The process involves depolymerising polymers to create monomers, which will in turn be repolymerised to polydimethylsiloxane (PDMS).