Abrasives Market Trends

Growth Drivers

• Growing Disposable Income – With the reduction of taxes and increase in wages, people get more disposable income. When disposable income is raised households have more money to save and spend on luxuries such as vehicles and electronics. Thus, the increasing disposable income is expected to boost significant revenue generation in the next few years. The disposable income of the U.S. as per the Bureau of Economic Analysis raised from -0.4% in June 2022 to 0.15 in Aug 2022.
• Elevation in the Number of Telecommunication Companies – Communication is getting faster and growing in volume every day, as more and more people get connected to the internet every day. As a result, the use of abrasives has also escalated for shaping and/or finishing optical elements, including the end faces of optical fibers and connectors. Therefore, the presence of a high number of telecom enterprises is anticipated to fuel market size. The wireless telecommunications business count raised over 2% each year in the U.S. during 2017-2022.
• Rising Electronics Production – Electronics industry is one of the fastest growing industries across the world as more and more people depend heavily on various appliances to get their job done. As the manufacturing process of the wafer, chip processing, LED, and other optic electronic devices and other parts used in the electronics industry are dependent on abrasives, the surge in electronics production is projected to contribute positively to market growth. The total imported value of electronics across the world as of 2021 was worth USD 3,594,456,634.
• Increasing Manufacturing Industries – As the world is recovering from the effects of the pandemic, the demand for goods and commodities is growing. Abrasives are commonly used in grinding, polishing, buffing, honing, cutting, drilling, sharpening, lapping, and sanding. Hence, the presence of a strong manufacturing industry base in the world is anticipated drive market growth. The manufacturing industry contributed USD 2269.2 to the U.S. GDP in 2020 which is 10.8% of the total GDP.
• Growing Production of Metals - The total worldwide production of crude steel increased gradually but steadily from 1.88 billion tonnes in 2020 to 1.94 billion tonnes in 2021. Iron and steel together account for 95% of the world's and the United States' annual total metal production.

Challenges

• Shortage of Raw Materials – Abrasives are usually produced by using raw materials including aluminum oxide, silicon carbide, cubic boron nitride, synthetic diamond, and ceramics. Most of the raw materials are obtained from renewable resources such as petroleum. As a result of the depletion of renewable resources, the availability of raw materials is lowering the manufacturing rate of abrasives. This trend is expected to restrict market growth.
• Strict Government Rules on the Use of Silica Abrasives
• Lack of Industry Labor