On December 4, Dow Wacker Zhangjiagang’s 400,000-ton/year monomer plant hydrolysis equipment accidentally leaked, and the plant was shut down for emergency repairs, which is expected to last about a week.
This news made the price of organic silicon market, which had already skyrocketed, jumped again. On the same day, the domestic monomer company silicone DMC offer rose by 300-500 yuan per ton, and some manufacturers have closed the offer.
Prior to this, the price of organic silicon increased by 87.3% in two months, and has been maintained at a high level of 33,000 yuan/ton recently. This accident may accelerate the continuous high and upward movement of the domestic silicone market.
In 2019, the global output of organic silicon was 4.72 million tons, equivalent to about 2.36 million tons of DMC; consumption was 4.96 million tons, equivalent to about 2.48 million tons of DMC. Among them, my country's organic silicon DMC output was 1.157 million tons, and the apparent consumption was 1.07 million tons.
In recent years, after the last round of supply-side reforms, the domestic organic silicon industry has gradually cleared its backward production capacity, and the competitive landscape has stabilized. There are only 10 existing manufacturers. At present, the combined production capacity of the top five domestic manufacturers accounted for approximately 69%, mainly including:
Xin'an Chemical 500,000 tons, Hesheng Silicon Industry 560,000 tons, Xingfa Chemical 340,000 tons, Sanyou Chemical 200,000 tons, Luxi Chemical 80,000 tons.
On November 9, Zhejiang Zhongtian Dongfang Fluorosilicon Material Co., Ltd. was shut down due to a fire in open-air barrels of high-boiling materials. The company involved has a capacity of 120,000 tons/year of organic silicon monomer unit. Affected by this, silicone prices rose more than 5% month-on-month that week.
From a global perspective, due to the high cost of producing organic silicon by overseas companies, and it is a dangerous chemical product, foreign production capacity has gradually withdrawn in recent years.
According to SAGSI statistics, following the successive withdrawals of the silicone production capacity in Germany and Thailand, the leading company Momentive plans to close its silicone production capacity in Watford, New York, equivalent to about 110,000 tons of DMC per year, accounting for the global silicone production capacity in 2019. 4.31%. After the exit, the proportion of Momentive's organic silicon production capacity in the global total production capacity will drop from about 20% in 2000 to about 3%.
The unexpected shutdown of Dow WACKER will further tighten market supply, and the domestic market will have a strong upward momentum in the short term.
However, in the long run, domestic organic silicon production capacity will continue to be released. For example, the 400,000 tons/year organic silicon monomer project invested and constructed by Hesheng Silicon Industry in Shihezi has basically been completed and is expected to be put into operation at the end of the year; Xin'an Co., Ltd. wholly-owned subsidiary Zhenjiang Jiangnan Chemical Co., Ltd. The second phase of the 150,000 tons/year organic silicon monomer project has recently reached production, and the company's production capacity will increase to 490,000 tons/year.
In addition, my country's organic silicon monomer plans to add about 900,000 tons/year of new production capacity in 2021. With the launch of these new capacities, the silicone market will be suppressed.
