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MARKET TRENDS: Construction Chemicals in China

April 1, 2009
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Demand to approach 40 billion yuan in 2012.

Silicone sealants were used in the construction of the Westin Diplomat Hotel in Florida. Photo courtesy of Dow Corning.


Table. U.S. Silicone Demand (million dollars)

Demand for construction chemical products used in on-site applications in China is forecast to approach 40 billion yuan in 2012, expanding 10.1% per annum from 2007. Growth will be driven by an increase in new construction, as well as more improvement and repair projects. These advances will, in turn, be fueled by continuing industrialization and urbanization in China.

These and other trends are presented in Construction Chemicals in China, a new study from The Freedonia Group Inc., a Cleveland-based industry research firm.

A focus on improving the general quality of construction will also boost gains by increasing the volume of chemicals used in construction applications, as well as spurring demand for higher-priced, value-added types. Production cost increases will contribute to growth in value terms, although competition within the industry will prevent suppliers from fully passing these effects through to end users. A slowdown in urban real estate markets in China will result in a deceleration in construction expenditure gains and associated chemical product sales from levels seen over the past decade.

Caulks and adhesives will remain the largest construction chemical product category in 2012, accounting for about 40% of total industry sales. Demand will be driven by continuing increases in the number of fenestration products and plumbing fixtures per structure in China, as well as by the use of high-performing adhesives in place of mechanical fasteners. Cement and asphalt additives will be the second-largest product category in China in 2012, with sales benefiting from increasing paved surface and high-rise building construction. Protective coatings and sealers will be the fastest-growing major product segment, with advances primarily deriving from improvements in the quality of construction in China.

Demand for chemical products used in nonresidential building construction will reach 8.7 billion yuan in 2012, the largest market for construction chemicals in China. Gains will be driven by sustained government investment in institutional buildings and foreign investment in manufacturing facilities, as well as by the use of high-end products in many of these applications. Residential building consumption of construction chemicals will be spurred by continuing urbanization in China, and by rising income levels and living standards leading to higher consumer expectations of housing quality. Non-building construction chemical demand will benefit from sustained high levels of government investment in transportation infrastructure.

For more information, contact Corinne Gangloff, The Freedonia Group Inc., 767 Beta Drive, Cleveland, OH 44143-2326; phone (440) 684-9600; fax (440) 646-0484; e-mail pr@freedoniagroup.com; or visit www.freedoniagroup.com.

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