Organosilicon is one of the important new chemical materials, known as "industrial MSG" and "technology catalyst". At the beginning of this century, breakthroughs were made in China's large-scale organic silicon production technology, and the industry ushered in rapid development. In 2006, China successfully launched anti-dumping on organic silicon, which provided a strong guarantee for the further development of the industry. After nearly 10 years of development, China ’s organic silicon (polysiloxane) production capacity, output and consumption in 2018 reached 1.307 million tons / year, 1.13 million tons and 1.045 million tons, all accounting for more than half of the global total World-renowned development achievements. However, while the total volume continues to expand, new problems have also arisen in the development of the industry, which require the competent government departments and the entire industry to attach great importance.


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Monolith faces risk of excess surplus




According to SAGSI statistics, as of July 2019, the domestic disclosed capacity of silicone monomers under construction projects is 6.24 million tons / year, which is equivalent to 3 million tons of silicone, equivalent to 2.2 times China's existing total capacity. , 2.8 times the consumption in 2018. It is estimated that in 2020 and 2021, about 600,000 tons / year of new monomer capacity will be released, and at least 1.5 million tons / year of monomer capacity will be released after 2022. Historically, due to factors such as the surge in organic silicon prices in 2006, there has been a rapid expansion of organic silicon production capacity in China since 2007. In 2006, China's monomer production capacity was about 350,000 tons / year, and in 2007 it increased to 700,000 tons. / Year, reaching 2.2 million tons / year in 2012. With the rapid release of new production capacity, the price of organic silicon has been falling. Since the large-scale loss of the organic silicon monomer industry in 2009 and continued to 2016, the industry has been able to absorb the excess capacity after nearly 7 years of painful adjustments.
It is assumed that 50% of the newly disclosed new production capacity can be realized, and taking into account factors such as the operating rate and exports, it is expected that the organic silicon monomer will be surplus in 2020, and it will take at least 6 to 7 years to digest the excess capacity again.
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Silicone price return is the big trend




This new round of investment is mainly due to the insufficient supply of organic silicon since 2016 and the stimulus of the surge in the price of basic raw materials. But on the whole, the reasons for maintaining high prices for silicones are not sufficient. As the market capacity of silicones gradually expands, the prices of silicones, especially basic raw materials, will return to reasonable levels. 1. The domestic market growth shifted from high speed to stable. The beginning of this century was the golden period for the rapid development of China's organic silicon consumption. However, since the last financial crisis, China ’s large-scale infrastructure construction investment has gradually declined, with infrastructure and traditional manufacturing as the The consumption structure of the main organic silicon market has accelerated, and consumption growth has dropped significantly. According to SAGSI statistics, the average annual growth rate of organic silicon consumption in China from 2001 to 2013 was about 21%, while it was only 8.8% from 2014 to 2018, of which the market growth rate was about 6% in 2014 and 2015. 2. Foreign economic slowdown affects the export market. Since 2009, the developed countries and regions have gradually recovered their economies and stimulated demand for silicones. In the same period, the supply of foreign silicones has decreased due to the withdrawal of equipment, which has promoted China's transition from a major net importer of silicones to a major one. Net exporting country. Affected by the US trade unilateralism and world economic cycle factors, the world economy has shown signs of weakening, which will affect China's organic silicon products exports in a certain period of time. The IMF predicts that the world economic growth rate in 2019 will further slow to 3.3% from a peak of nearly 4% in 2017 and 3.6% in 2018. In August 2018, the United States increased the tariff on primary-shaped polysiloxane (3910) exported by China to 25%. From January to May 2019, the export volume of China's primary-shaped polysiloxane (physical volume) was 99,000 tons, a year-on-year decrease of 10.8%, which was the first year-on-year decrease in exports in more than a decade. 3. Local markets face regulatory risks. The unique structure gives silicone materials excellent stability, and it also faces regulatory issues that are difficult to degrade. Although there is widespread and fierce debate on this issue, it has inevitably affected the traditional consumer market of some silicones, such as the daily chemical industry. In January 2018, the European Chemicals Agency (ECHA) announced a requirement to limit and ban the sale of silicone ring D4 / D5 leaching personal care products with a concentration of ≥0.1% in the EU market after January 2020; June , ECHA includes D4, D5 and D6 in the Candidate List of Substances of Very High Concern in Appendix 14 of the REACH Regulation; In January 2019, the ECHA Announcement proposed to limit or ban D4 / D5 / D6 concentration> 0.1% smear personal care products and other products On the market, it is also recommended to restrict the listing of leaching cosmetics containing D6 concentration> 0.1%. Polymers such as silicone rubber with a single ring body residual amount> 0.1% will also face such problems in the future.