China Business Intelligence Network News: With the growth of demand for high-performance materials due to social progress and economic development, the relationship between organic silicon materials and people's daily life, industrial and agricultural production and high-tech development has become closer. Silicone refers to a compound containing a Si-C bond and at least one organic group is directly bonded to a silicon atom. Conventionally, a compound which connects an organic group to a silicon atom through oxygen, sulfur, nitrogen, or the like is also used as a silicone. Compound. Widely used in almost all industrial fields and high-tech fields such as construction engineering, textile, electronics, transportation, petrochemical, aerospace, new energy, medical, machinery, paper, daily chemical and personal care products, becoming a modern industry and daily life. An indispensable high performance material.


The development status of the global organic silicon industry


Since the 1990s, the global silicone industry has developed rapidly. In 2013-2017, the global polysiloxane production increased from 1.62 million tons to 2 million tons, with an average compound annual growth rate of 5.8%.


In the past ten years, the increase in global polysilicon capacity has come mainly from China. Due to factors such as raw materials, costs and market, overseas capacity growth has been slow. At present, the global polysilicon production capacity is mainly concentrated in China and Western Europe, North America, Japan, South Korea and other developed countries and regions. In the future, there are still many new plans for China's polysiloxane production capacity. It is estimated that the global polysilicon production capacity will reach 3 million tons/year in 2022, and the output will reach 2.5 million tons.




Source: China Business Research Institute


In 2013-2017, the global polysiloxane capacity increased from 2.32 million tons/year to 2.5 million tons/year, with an average compound annual growth rate of 5.3%. In terms of capacity utilization, it is maintained between 70% and 80%, and the capacity utilization rate is high.




Source: China Business Research Institute


Silicone is a technology-intensive industry. From a global perspective, the world's major silicone manufacturers include Dow, WACKER, China Bluestar Group, American Moment, Japan Shin-Etsu, etc. Their production facilities are mainly distributed in China. And a few developed countries such as the United States, Germany, Britain, Japan, France and South Korea. Among them, China's production capacity is about 1.38 million tons / year, accounting for 55%; developed countries' capacity is about 1.06 million tons / year, accounting for 42.5%; other regions have a capacity of about 64,000 tons / year, accounting for only 2.6%.




Source: China Business Research Institute


Global organic silicon consumption continues to grow rapidly


Silicone is a new high-performance material. Due to the wide downstream demand, the growth rate of silicone demand has been higher than the global growth rate of GDP. Statistics show that the annual global compound demand for organic silicon is about 5%, while the global GDP growth rate of the IMF (International Monetary Fund) is only 3.55%.


According to the silicone market forecast report, the world organic silicon market will maintain an average annual growth rate of 6% in 2017-2022, and the market size will increase from $14.2 billion in 2017 to $19 billion in 2022. There are two main reasons for the growth of the organic silicon market in the future: First, silicones show their superior performance and role in an increasingly broad field, emerging applications such as new materials, biomedical, new energy, high-end equipment manufacturing and daily necessities. The consumer demand for silicones has maintained rapid growth. Taking silicone liquid glue as an example, the application of this product in medical devices will promote the further growth of the demand of the product on a global scale. The second reason is related to the fast-growing demand in emerging markets such as Asia Pacific, the Middle East and Africa. Emerging market countries have low per capita GDP, and there is still a big gap and growth prospects per capita organic silicon consumption compared with developed countries, which will greatly increase the market demand for organic silicon.


Emerging market countries also have huge demand potential


Statistics show that per capita organic silicon consumption is basically proportional to per capita GDP, and that the growth of organic silicon demand in low-income countries is more flexible for income growth. At present, the consumption of organic silicon per capita in emerging market countries such as China is less than 1kg, while that in developed countries and regions such as Western Europe, North America, Japan and South Korea is close to 2kg. In the future, with the development of the economy, the demand for organic silicon in emerging market countries still has huge growth potential. The Asian market represented by China, India, etc. has a large population base and low per capita consumption, and will become the world's major silicone demand in the future. Growth area.




Source: Public Information


China's organic silicon industry development status


In the past ten years, the global production capacity of organic silicon has shifted to China. China has become a major producer and consumer of organic silicon. The advantages of domestic organic silicon products have become more prominent, and the import substitution effect has been remarkable. According to statistics, as of 2017, there are 13 methyl monomer manufacturers in China (including Dow-Wake Zhangjiagang Plant), with a total polysilicon production capacity of 1.38 million tons/year (production capacity of 1.27 million tons/year). The output was 1.02 million tons, up 3.6% and 13.4% respectively. It is estimated that the total production capacity of polysilicon in China will reach 1.85 million tons/year in 2022, and the output will reach 1.5 million tons. The average annual growth rate during 2017-2022 will be 6% and 8% respectively.




From 2008 to 2010, China's new silicone silicon project expanded rapidly, and the production capacity of polysiloxanes exploded. In addition, the gap between domestic and foreign companies' technology levels and foreign countries, resulting in a significant decline in industry capacity utilization during the period. Since then, domestic production capacity has entered a stage of moderate expansion. With the gradual digestion of excess capacity, industrial technology advancement and the improvement of enterprise process management level, the industry capacity utilization rate has continued to rise. As of 2017, China's polysilicon capacity utilization rate reached 74.2%, an increase of 6.43 percentage points compared with 2016, the highest level in nearly a decade. It is estimated that by 2022, the utilization rate of polysiloxane capacity in China will further increase to 81%.




From the demand side, in the past ten years, China's demand for silicone products has been relatively strong, and demand has maintained rapid growth. According to statistics, in 2013-2017, China's apparent consumption of polysiloxane (yield + net imports) reached 980,000 tons, a year-on-year increase of 16%. With the gradual advancement of China's economic transformation, the rapid increase in the income level of residents, and the steady implementation of the national strategy of “Made in China and the “Belt and Road”, it is expected that the consumption of polysiloxane will continue to grow at a medium and high speed, during the period of 2017-2022. Both increased by 8% to 1.45 million tons by 2022. Polysiloxane products are mainly classified into silicone rubber, silicone oil and silicone resin.




Polysiloxane products are mainly classified into silicone rubber, silicone oil and silicone resin. In 2017, the consumption of polysiloxane in China was about 972,000 tons, and the proportion of polysiloxanes consumed in the fields of silicone rubber, silicone oil and silicone resin was as follows:




In 2017, the apparent consumption of polysiloxanes in China was 972,000 tons, of which the largest proportion of consumption was in the fields of construction, electronic appliances, electric power and new energy, medical and personal care. It is expected that in the next five years, in the downstream applications of many silicones, the demand for traditional fields such as construction, power, electrical appliances, textiles, and personal care will grow steadily; the demand for new energy, medical, electronics, and daily necessities will increase. .




More materials and analysis were from the "China's Organic Silicon Industry Market Prospects and Investment Opportunities Research Report for 2018-2023" issued by the China Business Research Institute.