Sector-Specific Conditions

We supply products to a wide range of industries. Our main customers are in the chemical, construction, electrical, electronics and photovoltaic sectors.

WACKER’s Chemical Divisions Deliver Good Sales Trend

The chemical industry performed well in 2018. Production grew in nearly all parts of the world, spurring demand for chemicals. According to the German Chemical Industry Association (VCI), global chemical sales (including pharmaceuticals) totaled €4.8 trillion in 2017, with Asia accounting for close to 60 percent. The favorable situation on international markets bolstered the performance of chemical companies in Germany. Given the good economic trend, demand for German chemical products rose in both domestic and international markets last year. Capacity utilization at German chemical plants in 2018 was about 84 percent. According to the VCI, chemical production in Germany expanded by 2.5 percent. As chemical prices gained 2.0 percent at the same time, the sector’s sales grew by 4.5 percent year over year to €204 billion (2017: €195 billion).

WACKER’s chemical divisions lifted their total sales versus the year before. The rise was driven by better prices, especially for silicone products, and by higher volumes. At WACKER SILICONES, demand was particularly good for silicone products for the electronics, textile and plastics industries. WACKER POLYMERS grew its sales of dispersible polymer powders and dispersions based on vinyl acetate-ethylene (VAE). The sales trend at WACKER BIOSOLUTIONS was especially positive for products used in pharmaceutical and agricultural applications.

Construction Industry Grows in 2018

According to market research institute B + L Marktdaten GmbH, the global construction industry grew by 2.9 percent in 2018, to US$9.1 trillion (2017: US$8.9 trillion). Construction contracts in Western Europe rose by 2.0 percent. In Eastern Europe, construction expenditures were up by 2.7 percent. The North American construction industry expanded by 3.2 percent in 2018. In Asia, construction-sector growth was especially strong, climbing by 4.0 percent.

Growth Rate in Construction by Region in 2018

WACKER POLYMERS lifted its sales further in construction applications. In dispersible polymer powders, volume gains were driven in every region of the world by the expanding dry-mix mortar market. In dispersions, WACKER POLYMERS posted gains in Asia, especially China. Key markets for our VAE dispersions include not only adhesives and sealants, but also water-based, environmentally compatible coatings. Construction applications at WACKER SILICONES also delivered sales growth. We continued to expand in all three product segments: building protection, sealants / adhesives and silane-modified polymers. In 2018, sales at WACKER SILICONES grew in every region. The trend was especially strong in the CIS, China and India.

Electrical and Electronics Sector Expands in Emerging Economies

According to the German Electrical and Electronic Manufacturers’ Association (ZVEI), the global electrical and electronics market grew 5 percent to about €4.4 trillion in 2018 (2017: €4.2 trillion). The main impetus came from China and emerging economies, which gained around 7 percent each.

WACKER has two business divisions that supply customers in the electrical and electronics sector. WACKER POLYSILICON delivers polysilicon to customers in the semiconductor industry. WACKER SILICONES increased its sales of silicones to the electronics industry by 20 percent. This growth was spurred especially by applications for automotive electronics. Silanes for electronic applications grew 12 percent. The increase was also double-digit for standard materials used in producing molded parts in diverse application fields.

Photovoltaics Pivotal to Global Energy Supply

In 2018, the global solar market edged above the year-earlier growth level. Various market studies and our own market surveys show that some 105 gigawatts (GW) were newly installed worldwide (2017: about 100 GW). That was about 5 percent more than the year before. Incentives and substantially lower system costs supported the global expansion of PV installations. The amount of installed PV capacity worldwide thus exceeded 500 GW at year-end 2018. About two-thirds of new capacity in 2018 was added in China, India, Japan and the USA. Changes in China’s incentive policies, though, caused newly installed capacity there to decrease from 53 GW in 2017 to 43 GW in 2018. China strongly curbed solar feed-in tariffs and the amount of new PV installations in June 2018. Additionally, efficiency gains lowered polysilicon consumption. This impacted volumes at WACKER POLYSILICON.

Despite the slight global rise in new installations, market conditions in photovoltaics remained challenging. In the USA and India, punitive tariffs on imported solar cells and modules pushed up prices, impeding growth in those markets. In Europe, an end to minimum prices for imported solar cells and modules took effect on September 3, 2018, but declining prices for cells and modules are expected to only begin unfolding their full market potential in 2019. Given continued overcapacity, price pressures persist at all stages of the supply chain. That prevented numerous solar companies from achieving any major full-year improvement in their financial situation.

Raw-Material Prices Generally Higher than a Year Earlier

In 2018, raw-material prices were markedly higher on balance than the year before. Vinyl acetate monomer (VAM) saw a price rise of around 14 percent. Methanol was 13 percent more expensive than in 2017. On average, the price of silicon metal increased by 3 percent. Ethylene prices climbed by an average of around 8 percent.

Market-Price Trends for WACKER’s Key Raw Materials