Introduction to Supply Trends of Organic Silicone in 2022

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In the recent tens of years, the increment of productivity of global monomers is mainly in China. It is due to the influences from raw material, cost and market; the overseas productivity faces a slower increment. At present, there are overall 16 organic silicon monomer manufacturers in the world. 4 of them are the tiers 1 who are Dow Corning, KCC, Wacker and ShinEtsu, their devices are located in the U.S., Germany, the U.K., France, Japan, South Korea and Thailand.

In 2022, the productivity of silicon monomer of China increases from 4.27 million tons to 4.91 million tons which is at an increment rate of 14.99%. Among these, Hoshine and Shandong Dongyue have increased their productivity successfully and the total annual productivities are increased to 1.36 million tons and 0.6 million tons which are at increasing rates at 27.7% and 12.22%, respectively. Some new-entries are the most important powers of competitions. Present the manufacturing processes are mature and the product quality and customer group are stable, the new entries still need to the overcome these obstacles. In the end of 2022, Hoshine’s 0.2 million ton organic silicon monomer device is built in Xinjiang successfully and it starts to work in the Q1 formally which has strengthen its top1 status in China’s organic silicone industry.

Distribution of Productivity of Global Silicon Monomer in 2022

In 2022, the global silicon monomer’s sum productivity is at the level of 6.98 million tons with an increment rate at 11.5%. The newly increasing part of 2022 is all from China. China’s productivity is at 70.34% of global productivity.

Recently, the productivity of organic silicon monomer in China is expanding fast, and overseas organic silicone companies are lack of cost advantages held in China thus many overseas top silicon manufacturers focus more on downstream products to extend the product chain. Also, some companies are under pressures of environmental protections to reduce some parts of their productivities which lead to the phenomenon. It is according to the CEN’s report, KCC has closed 0.22 million tons of productivity in the U.S. and 0.15 million tons of productivity in Germany in 2021. Now its sum productivity is 0.24 million tons of productivity.

The total overseas productivity decreases of 0.5 million tons of productivity and there will be no increment in the near future. In the past 10 years, overseas productivity of organic silicone has been decreased from 2.8 million tons to 2.07 million tons including 0.84 million tons for Dow Corning, 0.24 million tons for KCC, 0.44 million tons for Wacker, 0.35 million for ShinEtsu and 0.2 million tons for Blue Star (France).

Change of China’s Productivity of Silicon Monomers from 2018 to 2022

It is until the end of December 2022, the increment of China’s organic silicon monomer reaches 1.1 million tons annually. The new increment not only comes from the present increment from existed companies, but also from some new companies. This means the supply balance of the recent tens of years has been changed and the competition will be more extreme.

If we see the changes by geographical zones, it is since the Eastern China has more end-user clients, many old famous companies are concentrated in this region with a more stable laboring rate. The other regions of China has lower labor cost so some big companies are also attracted to build factories there.

In 2022, the Eastern China contributes 51.32% of national annual productivity, and Northern China for 13.24%, Central China for 7.33%, Northwestern China for 20.37% and Southwestern for 7.74%.

Situations of China’s Importation of Initial Form of Polysiloxane from 2018 to 2022

In the past 5 years, it is since China’s national manufacturing starts to expand, the reliability of imported polysiloxane is decreasing. In the structure of importation, the main parts are still high-end and special products. In 2022, it is since the stability of overseas manufacturing is lower, the imported amount decreases and in 2022 the importation amount of initial polysiloxane is 0.0973 million tons with a decrement rate of 26.99%.

First of all, the new objects of manufacturing devices have been applied successfully in recent years thus the self-suppling amount in China is increasing rapidly; Secondly, 2022’s China’s organic silicone market is dropping thus the users have a lesser chance to enter the market and curb the importation trend; Thirdly, China’s companies have advanced their manufacturing processes recently, thus more domestics buyers choose the local products rather than overseas products. Finally, it is since overseas top companies continue to close foreign factories, and the global energy price keeps increasing and some other reasons made the importation source becomes more and more unreliable.

From the unit price of importation and exportation, China’s exported organic silicone product’s unit price is between 2700 and 4200 USD per ton. The main exported products are low-end medium products and initial polymers. The imported product’s unit price is always above 5000 USD/ton, the price distance is pretty big. Besides the influence from tariffs, the most important reason is that China is still short of suppling high-end products.

In 2022, the imported products are mainly from Germany, the U.S., Japan and Thailand. The main suppliers are Dow, Wacker, ShinEtsu.

Among the six multinational enterprises, the organic silicon devices are mainly distributed in the U.S., Germany, the U.K., Japan, Thailand, France and South Korea, which are all China’s main imported countries. In 2022, the top ten imported nations of China have not been changed and they contain 95% of total importation. In the top 3, 18.6 thousand tons for Germany and Wacker with a decrement rate at 16.2%; 17.5 thousand tons of for the U.S. and Dow with a dropping rate at 25.07%; 16.3 thousand tons for Japan with a decrement rate at 15.18%. Also, Thailand also faces dropping due to the focuses of Thai supplies has been changed.

Summary

China’s supply chain of organic silicone products is increasing fast, and this also means the trend of the whole organic silicone industry may face changes as well.