The silicone industry is developing rapidly. How to meet the new market after rapid expansion?

In the past 10 years, China's organic silicon industry has developed rapidly. As of 2018, the production capacity, production and consumption of silicones (silicone) reached 1.307 million tons/year, 1.13 million tons/year and 1.45 million tons/year, respectively, accounting for more than half of the global total. However, at the same time of rapid expansion, the organic silicon industry has also experienced problems such as rapid construction of new capacity and insufficient quality of advanced technologies. The industry is facing a new round of overcapacity.

According to the statistics of the National Silicon Industry Green Development Strategy Alliance (SAGSI), as of July 2019, the domestically disclosed capacity of the silicone monomer project under construction is 6.24 million tons/year, which is equivalent to 3 million tons/year of siloxane. It is 2.2 times of the total capacity in China. It is estimated that about 600,000 tons/year of new monomer capacity will be released in 2020 and 2021, and at least 1.5 million tons/year of planned new capacity after 2022. The newly added production capacity is gradually put into use, and the consumption growth rate is declining obviously. In addition, the export market is limited. It is expected that the price of organic silicon, especially the basic raw materials, will return to a reasonable level, and the price will return to a trend.

Recently, major silicone companies at home and abroad have announced their first half results. Affected by the overall economy and industry situation, compared with the first quarter, the performance has slightly decreased.