Global Abrasives

Global Abrasives

Global demand for abrasives is forecast to rise 5.2% per year to $67.3 billion in 2028, fueled by rising durable goods manufacturing activity worldwide. The pace of growth in inflation-adjusted terms will be similar to that in the 2018-2023 period. However, an expected moderation in pricing increases following a period of high inflation will lead to slower demand gains in nominal terms.

Healthy Growth in Semiconductor Manufacturing Drives Gains in Electronics Market

Electrical and electronic equipment manufacturing was the fastest growing market for abrasives from 2018 to 2023, and this trend will continue through 2028. Growth was especially rapid for electronics manufacturing. In particular, rising production of semiconductors led to rapid gains for abrasives used in the chemical mechanical planarization (CMP) process, and these applications led to fast growth in China and Taiwan.

In 2023, global semiconductor manufacturing declined from pandemic-era highs, and many producers of CMP abrasives saw their sales fall. However, the semiconductor industry showed signs of recovery in the fourth quarter of 2023, and global electronics manufacturing in the aggregate is expected to rise at a healthy rate going forward. Concerns about supply chain security and Taiwan’s fraught relationship with China also pose opportunities for growth in CMP abrasives demand in other countries, most notably the US.

Rapid Growth Expected Throughout Southeast Asia

Over the 2023-2028 period, China, India, Indonesia, Taiwan, and Thailand are all expected to be among the world’s fastest growing national markets for abrasives. In addition, a number of countries that are currently relatively minor abrasives markets – such as the Philippines and Vietnam – are also forecast to post rapid growth.

Gains will be driven by broad expansion of durable goods manufacturing industries throughout the area. These countries feature both fast growing domestic markets and expanding export-oriented manufacturing industries, with high levels of foreign investment from both Chinese and Japanese firms and Western multinationals. In addition, the attractiveness of manufacturing in the area will support sizable expansion of local abrasives industries to bolster rising demand.

Production Costs Stabilizing Following Period of Volatility

Beginning with the onset of the COVID-19 pandemic in 2020 and continuing into 2023, abrasives producers faced unusually high growth in manufacturing costs. Prices for key materials like iron and steel surged, while elevated energy costs contributed to rising prices for a wide variety of synthetic materials. Transportation costs spiked due to both high petroleum prices and strained capacity for international shipping. As a result, manufacturing costs for abrasives producers increased rapidly, leading to price increases and especially fast market expansion in dollar terms.

By 2024, prices for most raw materials had come down from pandemic-era highs, and logistics issues associated with the pandemic had mostly faded. As a result, stabilizing production costs are expected to lead to slower, more historically normal pricing increases, and abrasives producers will face a less volatile and uncertain logistics environment.

Study Description

This Freedonia industry study analyzes the $52.3 billion global abrasives industry. It presents historical demand data (2013, 2018, and 2023) and forecasts (2028 and 2033) by material (nonmetallic, metallic), product (coated, bonded, loose grains and powders, metallic), market (durable goods manufacturing, cleaning and maintenance, other markets), and region (North America, Central and South America, Western Europe, Eastern Europe, Asia/Pacific, Africa/Midesat). Abrasives raw materials demand is also addressed. The study also evaluates company market share and competitive analysis on industry competitors including Bosch, Entegris, Saint-Gobain, 3M, and Winoa Group.