Adhesives and Sealants Market Trends

Growth Drivers

• Sustainability and bio-based innovations: The adhesive industry is gradually moving toward bio-based and environmentally friendly products to cater to the market demands and regulatory policies. International policies such as the European Green Deal are now putting pressure on chemical firms to reduce emission intensity. Water-based and solvent-free formulations are becoming more common, which means that they release fewer VOCs. Certification like the ISCC PLUS helps enhance the credibility of sustainability claims and gain the trust of the customer.
  
  Businesses that are adopting renewable raw materials are creating better strategic positions in the adhesives and sealants market. For instance, in July 2023, Henkel reported its achievement of carbon neutrality in the aerospace manufacturing plant situated in Spain. The transformation of three more sites for adhesive production to carbon neutrality was also reported by the company. The shift toward circular economy solutions is already evident in the adhesive industry worldwide. 
• Construction and infrastructure boom: Growth in the construction industry is fueling steady growth in demand for adhesives and sealants in Asia, North America, and Europe. In December 2024, Soudal acquired a Japanese adhesive firm as it extended its business into Asia, where the construction sector is rapidly growing. Expansion of residential, commercial, and industrial sectors has necessitated the use of better sealing techniques to enhance energy efficiency and product reliability.  In addition, smart city development and green building regulations are adding to the growth of the specialty adhesives market. They are used in structural glazing, facade sealing, and as insulating panels and adhesives. Such regional development initiatives as India’s Smart Cities Mission remain crucial sources of growth.
   
• Automotive lightweighting trends: The increased demand for lightweight materials to enhance fuel economy and emission reduction in the automotive industry is driving adhesive consumption. In September 2024, Ingevity launched the Capa polycaprolactone technology at FEICA, focusing on the sustainable improvement of adhesives’ performance. In automotive assembly, adhesives eliminate the need for mechanical fasteners and result in lighter and stronger structures.
  
  Another factor that is driving the need for more bonding solutions is the increasing manufacturing of electric vehicles, which is supported by regulatory bodies. One such example is the announcement of grants of USD 996 million from the Innovation Fund by the EU for six pioneering projects of EV battery cell manufacturing. In modern vehicles, adhesives are used for noise control and battery integration. Manufacturers are shifting their focus towards eco-friendly and high-performance adhesives in the automotive sector for safety and compliance. This trend suggests strong adhesive consumption throughout the global automotive manufacturing regions.

Challenges

• Challenges of the supply chain and shortage of materials: Raw material availability continues to pose a challenge to adhesive producers by affecting production timelines and costs.  The use of specialty chemicals such as isocyanates and acrylates make manufacturers vulnerable to fluctuations in price. For example, in April 2024, Bostic announced a hike of a maximum of 7% in the prices of paper, hygiene, and cardboard specialty adhesives based on their grades and production due to worsening costs and supply of required raw materials. The company decided to raise the prices due to the inflation in costs for manufacturing and transportation. Increasing prices of adhesives can lower the demand for the same, and hamper the expansion across sectors, such as automotive, construction, and others.
   
• Regulatory complexity and compliance pressures: The pressure on adhesive manufacturers to address emissions, chemical safety, and sustainability reporting is intensifying.  The certification standards for bio-content, emissions, and product transparency are steadily increasing. If the rules are not followed, the consequences may include restricted adhesives and sealants market access and loss of customers’ trust. In January 2024, Avery Dennison revealed a loss of sales by 2%, and the revenue of the business stood at USD 1.4 billion. With loss of sales or trust of customers, the revenue of the overall market is reduced, and future opportunities are limited, which hinders the overall market growth.