Analysis on the development of silicone monomer industry

1. Analysis of industry operation characteristics

(1) The upstream silicone monomer industry is in a phased surplus, with broad development space in the future

As of 2012, the production capacity of silicone monomer in China has reached 2.13 million tons, the operating rate is only about 65%, and the domestic apparent consumption is 1.38 million tons. The market consumption is expanding and has not yet been fully opened, showing the characteristics of overcapacity and declining corporate profitability. In addition, the newly launched enterprises have not yet fully mastered the production process and many enterprises have been transformed and expanded, resulting in a low overall operating rate of the industry. With the gradual improvement of the technology, the operating rate of the silicone unit will gradually increase.

As one of the high-performance special rubbers, silicone rubber is the most important non petroleum based synthetic rubber. With the sharp rise in the price of petroleum, China has made breakthroughs in the production technology of silicone monomer, the price of silicone rubber has been lower than that of petroleum based synthetic rubber since 2011, and it has begun to replace petroleum based synthetic rubber on a large scale. This field will greatly expand the market space of the silicone industry and drive the consumption of silicone oil, silane coupling agent, silicone resin and other silicone products.

(2) The price of organic silicon monomer continues to decline, and the price of deeply processed silicon chemical products is firm

In 2012, affected by the European debt crisis and the slowdown of domestic macroeconomic development, the silicone industry also experienced a cold winter. Throughout the year, the prices of organic silicon chemical industry chain products generally showed a downward trend. The release of large amount of new capacity and the slowdown of terminal demand have made the situation of excess supply of silicone monomer increasingly prominent. In 2012, the average price of silicone DMC was 17280 yuan/ton, a year-on-year decrease of 14.3%. Among them, the price of organic silicon chemical raw materials such as industrial silicon rose, the high consumption of electricity and steam in organic silicon production appeared, the production cost remained high, and many organic silicon monomer manufacturers lost money. Accordingly, it is good for downstream silicone production enterprises, such as Huitian Rubber, Hongda New Materials and Sibao Technology, to maintain a profit of about 20%.

After the breakthrough of domestic silicone monomer technology, foreign silicone giants have invested in building factories in China to accelerate the expansion of silicone monomer production capacity. Most multinational companies sell silicone monomers at low prices, mainly relying on downstream silicone rubber, silicone oil and other deep-processing products to obtain profits. Through the integrated competition strategy, market share and profitability are considered, which makes the silicone industry compete fiercely in the upstream monomer field, With the fall of monomer price, the silicone monomer industry has changed from a new material industry that has obtained excess income to a bulk material industry that has obtained normal average income. The future competition will focus on the technology and management level, and the excess income will be transferred to the downstream high-end deep processing products.

2. Development opportunities

As an irreplaceable important material in the development of various pillar industries of the national economy, silicone products have been continuously developed in new application fields, which has great development opportunities and market space.

The production center of silicone monomers in the world is shifting to China. Foreign silicone monomer manufacturers have invested in the production of silicone monomers in China. China has obvious raw material advantages and market advantages in developing the production of silicone monomers.

(1) Advantages in raw material resources

The main starting materials of silicone monomer are metal silicon, methanol and hydrogen chloride, of which metal silicon accounts for the highest proportion of raw material cost, followed by methanol. Metallic silicon is produced from quartz sand or silica and carbonaceous reductant as raw materials. It is a high energy consumption product, and the environmental pollution is relatively large. Therefore, developed countries in Europe and the United States have basically stopped producing this product and mainly rely on imports. For a long time, China has been the largest producer and exporter of metal silicon in the world. According to the statistics of the Silicon Industry Branch, China's industrial silicon output in 2012 was 1.13 million tons. According to incomplete statistics, by the end of December 2012, China's industrial silicon production capacity had been 3.6 million tons, and another 600000 tons were under construction. According to the national industrial policy, China will start to eliminate small furnaces below 6300KVA by the end of 2012. If the national policy can be strictly implemented, it is estimated that the industrial silicon capacity of China will be about 4 million tons by 2013. China is still a large methanol producer. In 2012, China's total methanol production capacity reached 52 million tons, including 5.5 million tons of new capacity; The methanol output was 26.405 million tons, up 15.1% year on year; The unit operation rate is less than 60.0%.

China's chlor alkali industry is very developed. By the end of 2012, the capacity of caustic soda in China had exceeded 38 million t/a and the output was 26.986 million tons, providing sufficient chlorine resources for the production of silicone monomers. Therefore, China's silicone industry has outstanding competitive advantages in terms of raw material supply.

(2) Huge market demand

With the continuous expansion of the application field of silicone materials, the development of the global silicone industry has been faster than the economic growth. Although the market of silicone materials in developed countries has been very developed, due to the continuous emergence of new uses of silicone materials, the future consumption of silicone materials will still maintain an average annual growth rate of 4-5%. In addition, the silicone material market in the Asia Pacific region, the Middle East and Africa has entered a growth period, and its future development will be higher than that of developed countries in Europe and the United States. China's rapid economic growth and the development of construction, electronic appliances, automobile and other industries will greatly drive the organic silicon consumer market, and the domestic market demand will remain strong.

(3) The production center of silicone monomer in the world is rapidly transferring to China

Foreign silicone monomer manufacturers have invested in China one after another. The global new silicone monomer production capacity mainly comes from China. In the future, the international silicone monomer incremental market will mainly rely on China's export supply. In recent years, China's polysiloxane export has increased year by year, especially from 31000 tons in 2006 to 96000 tons in 2012, with an average annual growth rate of 21% from 2006 to 2012. In the future, the international silicone monomer incremental market will mostly rely on China's export supply, and the export volume may exceed one third of the domestic output. Therefore, in the future, China's silicone monomer development will not only replace imports to meet the domestic market, but also face the international market, becoming the world's largest silicone monomer producer and exporter. The export market will provide more broad space for the development of China's silicone monomer industry.

(4) The domestic silicone monomer industry has a tendency to transfer to the western region

The production of 1 ton of silicone rubber with coal and quartz sand as starting materials requires more than 10 tons of coal (power coal with calorific value of 5500 kcal). The key cost of silicone rubber is coal, so it is also called "coal to rubber". In the future, the silicone monomer project will be transferred to the western energy advantage region.