U.S. specialty silicas demand to increase 7% annually. (Market Focus).

Demand for specialty silicas in the U.S. is expected to increase seven percent yearly to $1.3 billion, according to a new study from The Freedonia Group, a Cleveland, Oil-based industrial market research firm.

New applications, including chemical mechanical planarization (CMP) slurries, high performance tire fillers and ink jet paper coatings, will continue to drive growth. In addition, gains will be fueled by a general pickup in economic activity front the 2000-2001 level, which will directly benefit such key specialty silicas end-use markets as electronics, industrial rubber products and chemicals. Further gains will be restrained by market maturity and competition from alternative materials in established markets, such as foods and beverages, cosmetics and toiletries, and refractories, the study Specialty Silicas, states

Precipitated silica will remain the largest type of specialty silica, with above-average gains of 7.5% per annum, spurred by recovery in industrial rubber products output and expanding applications in the U.S. tire market. Development of highly dispersible silica, plus consumer interest in vehicle tire safety and fuel economy, are expected to begin to open the U.S. market to silica-reinforced tires.

Fast value growth will also be recorded by fumed silica, with demand forecast to rise 7.7% annually. Advances will be propelled by robust growth in the market for CMP slurries as the electronic components industry begins to recover from 2000-2001 levels which were impacted by economic slowing and recession. However, competition from lower-cost silicas and other abrasive materials in wafer polishing may restrain further growth opportunities.

In precipitated silica, the development of highly dispersible silica has been a key factor in growth as a replacement for carbon black in tire reinforcement. Production of high cleaning, less abrasive silica will support healthy gains in toothpastes. Demand for silica sol will benefit not only from double-digit growth in CMP slurries, but also from continued gains in paper applications for retention and drainage aids.

Rubber will remain the largest market for specialty silicas in the U.S., accounting for nearly one-fifth of total demand in 2001. Growth will be driven by stellar annual gains of 8.4% through 2006 in non-tire applications, the market sector which bore the brunt of declines in rubber consumption in the late 1990s and early 2000s, and which is expected to rebound to historical levels by mid-decade. Silica-reinforced tires are also expected to make significant in-roads into the U.S. market, although for the time being, success will be mainly in niche markets such as truck tires, winter tires and high-performance tires.

Aftermarket grew 3.5%

The size of the U.S. motor vehicle aftermarket grew by 3.5 percent in 2001 to $255.2 billion, with the automotive segment recording the largest growth, a 4.8% jump to $178.8 billion, according to the AAIA 2002-2003 Aftermarket Factbook, just published by the Automotive Aftermarket Industry Association (AAIA).

Highlights of this year's Factbook include:

* Vehicle service repair, accounting for two-thirds of total automotive aftermarket sales, rose 6.3% to $123 billion.

* Do-it-yourself (DIY) sales were up 2.2% in 2001.

* The number of aftermarket industry mergers and acquisitions slowed and the value of the deals was significantly less in 2001.

* Windshield wiper blades were the strongest sellers in the aftermarket accessories category, with a 9.8% increase.

* A 6.2% increase in sales for the collision repair industry reflects statistics reporting more vehicles involved in collisions in 2001.

* U.S. motor vehicle parts and accessories exports declined by 7.2 percent to $50.2 billion.

* Medium and heavy duty aftermarket product sales declined by 1% to $60.9 billion.

Tread rubber shipments to increase in 2002

Shipments of tread rubber used to produce retreaded tires will increase in 2002, according to the Rubber Manufacturers Association. The RMA says the positive trend should continue through 2007.

According to the RMA, 2002 shipments will increase 2.1% over 2001 figures; this growth represents 306,000 additional retreaded tires. Growth in tread rubber shipments from 2002 to 2007 will average 1.8% per year.

In 2001, the 16.4 million tires retreaded in the U.S. were used by commercial aviation, commercial trucks, school buses and off-the-road vehicles.

Demand for specialty silicas (million dollars)

                                               % annual growth
Item                      1996   2001   2006     01/96   06/01

Specialty silica demand    730    900   1260      4.3     7.0
Precipitated silica        284    342    490      3.8     7.5
Fumed silica               215    290    420      6.2     7.7
Silica gel                 131    146    187      2.2     5.1
Silica sol                  65     82    110      4.8     6.1
Fused silica                35     40     53      2.7     5.8