Since the reversal of the unseen market in the second half of last year, the price of silicone products has experienced a short period of backwardness. It has stabilized since December last year, and this year it has started a new round of rising since New Year's Day. The industry believes that silicone is affected by various factors such as parking and environmental protection, and the supply and demand pattern has improved significantly. It is expected to usher in a long recovery cycle.




Silicone is expected to usher in a recovery cycle


The data shows that the mainstream transaction price of domestic DMC manufacturers last week was 28,500 to 29,000 yuan / ton; D4 domestic brand reported 30,000 to 31,000 yuan / ton; 201 methyl silicone oil (conventional viscosity) domestic brand reported 30,500 to 32,000 yuan / ton; trichloro Hydrogen silicon reported 7200 to 7300 yuan / ton. The above prices are all higher than the previous week by 500 to 1000 yuan / ton.


At the same time, the supply of silicone crosslinkers has continued to be tight, and prices have risen sharply. Among them, methyl tributol sulfonyl silane manufacturers offer 36,000 yuan / ton, vinyl tridecyl silane manufacturers offer 48,000 yuan / ton, and supply is limited, a difficult to find. According to downstream customers, in the past month, not only the cross-linking agent has soared, but also various raw materials such as silicone oil, 107 rubber and fumed silica have also raised prices by 1,000 yuan/ton. Due to the pressure of high raw materials, the downstream silicone rubber companies have also followed suit.


According to analysis, the reason for the price increase of silicone products is first of all short-term factors. After New Year's Day, Zhejiang Sheng'an used a synthetic butane-ketone-based material for the synthesis of silicone cross-linking agent and silicon curing agent. After that, Dow Corning announced that the shipment and ordering time would be due to the system migration of Dow in early February. Change, delivery or delay; in addition, the domestic northern market has been hindered by the transportation of goods in the rain and snow weather. Driven by the above various factors, the price of silicone downstream products and some by-products, mainly composed of silicone oil, 107 rubber and raw rubber, rose again.


On the other hand, the environmental protection inspectors since 2016 have had a great impact on the operating rate of organic silicon enterprises. The industry has increased its capacity and the concentration has increased significantly. At present, the total capacity of Shanxi Sanjia and Jiangsu Hongbo has been suspended and the production capacity has been suspended. The actual production capacity is only 2.5 million tons, and the capacity of the top five domestic enterprises has exceeded 50%. In the process of rapid increase in market prices, the operating rate of enterprises is still not up, and many companies have longer maintenance cycles, which has a lot to do with the disposal and discharge methods of waste gas in the silicone industry.


US market research firm MarketsandMarkets recently released a silicone market forecast report that the world's organic silicon market will maintain an average annual growth rate of 5.85% in the next five years, and the market size will be US$14.2 billion (US$93.77 billion) in 2017. It rose to 18.87 billion U.S. dollars in 2022 (about 124.68 billion yuan).


As a fast-growing emerging country and the world's largest organic silicon market, China has a large share of the world. In the future, with the rapid development of the construction industry, automobile manufacturing, electronics, medical and other industries, the demand for organic silicon in the Chinese market will maintain rapid growth, and it will also be a battleground for many silicone companies.


According to industry insiders, the silicone industry has experienced a decline in capacity for the first time in 2016. The new capacity is limited in the future, and the industry supply pattern is basically stable. Last year, the domestic DMC output was 980,000 tons, and the export volume reached 20%, indicating that overseas demand has rebounded, supporting DMC prices in the off-season high. With the slow growth of domestic and international demand, the industry is expected to form a harmonious ecology and maintain a better profitability under the environment of continuous tightening of environmental protection supervision.