The global market for adhesives and adhesive applying equipment is expected to total almost $48.7 billion and $62 billion in 2016 and 2021, respectively, reflecting a five-year compound annual growth rate (CAGR) of 5%.

The rising cost of oil and its effect on raw material prices is reportedly a key growth factor in the adhesives industry. A new report from BCC Research reveals that, although prices of oil and intermediate materials have risen sharply, prices of finished goods have not.

According to “Adhesives and Adhesive Applying Equipment: Technologies and Global Markets,” the dynamic changes taking place in the adhesive industry are strongly driven by economic and environmental factors, including oil prices. The most immediate challenge to adhesive manufacturers is curtailing a wave of raw material price increases, mainly attributable to higher oil and natural gas prices.

“Natural gas prices are likely to remain well-above historical levels, which will keep industrial chemical prices from falling sharply when oil prices recede,” said Srinivasa Rajaram, research analyst. “Prices of finished goods have not increased to a significant level, thus leading to a high degree of uncertainty regarding higher inflation in the pipeline due to such a disparity.”

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