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Analysis of the status quo of China's organic silicon monomer producers and consumer markets
Oct 13, 2018

 The current situation of China's silicone monomer producer disputes can be summed up in one sentence: the group stands tall and the wind meets.

   

    At present, there are 15 manufacturers of built-in MCS production facilities in China: Dow Corning Zhangjiagang, Blue Star Fire, Zhejiang Xin'an (Hongda New Materials), Zhejiang Hesheng, Tangshan Sanyou, Shandong Dongyue, Jiangsu Hong Bo, Zhejiang Hengyecheng, Zhejiang Zhongtian, Shandong Jinling, Sichuan Sifeng, Shanxi Sanjia, Hubei Xingfa, Shandong Luxi, Jiangsu Meilan.


    According to industry statistics in 2013, the annual production capacity of the above-mentioned MCS devices is more than 2.1 million tons. This data does not rule out that some enterprises claim that the production capacity is abnormal, which is inconsistent with the actual design capacity. This is a bit like the strategy of the Three Kingdoms Cao Cao, which is called Jiangdong. It is a strategy to shock the opponents and have a place in the industry and the market.


    So, what is the actual MCS output of domestic silicone monomer producers in 2013? Before answering this question, let us sort out and analyze the consumer market at home and abroad.


    The first set of data: According to the latest industry report data, the global organic silicon consumption growth rate has been around 5% since 2008, and the polysiloxane production in 2012 was about 3.63 million tons. From the perspective of consumption regions, the world's major consumer regions are currently concentrated in China, North America and Europe, with the proportions of these three regions being approximately 30%, 20% and 25% respectively. In addition, according to a recent report by MSM (MarketsandMarkets), a well-known American consulting company, the global market for silicones (including elastomers, liquids, and resins) will reach US$19.4 billion by 2017. It is expected that the global silicone market will be 2012-2017. The growth rate is 6.8%.


    The second set of data: In recent years, China has become the engine of global economic recovery after the 2008 economic crisis. China's organic silicon consumer market is also the fastest growing market in the world, with an average annual growth rate of over 15%. Comprehensive customs statistics and consumption. Market data (GLGDATE), the total imports of silicone (including monomers, primary polymers, silicon products, etc.) in 2013 (in terms of siloxane) is about: 360,000 tons, the total domestic consumption of organic silicon (to silicon oxide) Alkali) is about 1 million tons, and total imports account for 34% of total consumption.


    Through the analysis of the data of the above two sources from different sources, in 2013, the total consumption of China's silicone market was about 1 million tons of siloxane, equivalent to about 2 million tons of monomer, except for the total import volume of customs statistics, we have Answer the answer to the question:


    In 2013, domestic producers of organic silicon produced approximately 1 million tons. Considering the customs declaration of imported products, the division of silicon products, and the export of products, we can set the actual production of domestic MCS at 90-100 million tons. At the same time, we also got another answer: in addition to the false report capacity and the new device production interval, in 2013, the domestic MCS device operating rate is only about 70%.


    Can this group of data analysis convince you?


    The opaque vendor and market information forces us to learn to use the data from different channels to sort out and analyze the industry and market fundamentals.


    After we sort out and analyze the production capacity and market, everyone in the industry will have the same problem: From 2006 to 2012, the investment in silicone monomer projects has been raging and blooming everywhere. What caused this situation?


    What caused the extreme expansion of domestic MCS capacity?


    The author believes that the overheated imagination of China's silicone monomer project investment in the past 10 years can be answered from the analysis of policy, capital, technology and market.


    1. From the perspective of capital and financing, the reform dividends generated by China's reform and opening up over the past 30 years have been gradually released between 2001 and 2010, but the distribution of reform dividends is not balanced. The distribution entities are state-owned enterprises, powerful interests, and some private enterprises. Enterprises, it should be said that these entities or enterprises have a large amount of idle funds on hand; at the same time, the global organic silicon network learned that in 2008, the country's economic stimulus policies to cope with the global financial crisis were released, and bank loans were relatively loose; 60% of the total consumption should be imported from abroad, and the economic benefit evaluation of the project appears to be excessively profitable. The nature of capital chasing profits and these specific conditions have greatly stimulated the desire of companies to invest in silicone monomer projects.


    2. From a policy perspective, the state's policy of stimulating the economy has greatly mobilized the impulse of physical investment. Local governments have accelerated the development of the local economy, increased regional GDP, established political achievements, and introduced and constructed industrial projects as the mainstay for assessing local cadres. Indicators, these have played a role in fueling the development of silicone construction projects.


    3. From the perspective of production technology, the domestic organic silicon monomer production technology market is active, and the basic production and design data of silicone monomer devices are obtained by design units such as Hualu Engineering Company, Sinopec Ningbo Design Institute, and Ningbo Second Hospital. Coupled with the loss of some old silicone production companies (Jihua, Spark, original Kaihua), the domestic production of organic silicon monomer is almost open.


    4. From a market perspective, China's silicone consumer market has been the fastest growing market in the world in the past five years, with an average annual growth rate of over 18%. China's silicone deep processing and its application, is forming a group of enterprises and industrial groups with high temperature glue, liquid silicone rubber, textile auxiliaries, silane coupling agents, etc., active in domestic and foreign markets mainly concentrated in Guangdong, Jiangsu, Zhejiang And these areas of Jiangxi.


    The application space of silicone products has been greatly improved compared with the past. This may be due to the people's and market's understanding of silicone products and the improvement of application capabilities, and continue to stimulate the development of the silicone industry in the depth direction. It should be said that the consumption market of organic silicon products in China continues to expand, and the application fields are continuously broadened, which has injected confidence into investors. The global organic silicon network believes that the overheating of investment in the silicone industry will inevitably change the supply and demand balance of the silicon product market, and will also trigger the automatic adjustment function of the market and redistribute social and natural resources.


    From 2007, French Rhodia silicone was acquired by Bluestar. By this year, HTC New Materials was acquired by Zhejiang Xin'an, and today, Momentive Gaoxin filed for bankruptcy protection. The silicone industry has been performing historical dramas of merger, integration and restructuring. So, what kind of situation is the current domestic silicone industry facing? (To be continued) (Source: Global Silicone Network)


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