Why did the profit of organosilicon market increase sharply in half a year?


In the first half of 2019, China's silicone monomer enterprises started construction at a high level as a whole, with sufficient market supply and a certain stock accumulation. Compared with the sharp rise and fall of prices in 2018, the price fluctuation of silicone in China in 2019 was narrow and contracted, which tended to be relatively rational. However, under the influence of shrinking export volume and off-season demand, the price of silicone has been hovering at a low level. In the first half of the year, China's macro-economic development has shown a steady and progressive trend, and the downstream consumption areas have their own characteristics. The overall macro-environment in the second half of the year is expected to remain optimistic. The downstream market demand for organosilicon will be increased, and the price of organosilicon is expected to fluctuate steadily and slightly.


High-level supply capacity of individual enterprises in start-up


In the first half of 2019, the output of organosilicon monomer in China was about 1.184 million tons, with an average start-up rate of 86%. Except for the long-term parking and overhaul of Jinling and Zhongtian devices in Shandong Province in May and June, the other monomer enterprises started construction at more than 80% level, and the market supply capacity became stronger. In the second half of the year, Hesheng's 200,000 tons silicone monomer project is expected to be completed and put into operation, and the domestic market supply will be further enhanced.


Price volatility narrows and hovers low


Compared with the sharp price fluctuations in 2018, in the first half of 2019, the price of organosilicon in China tended to be rational, the increase rate narrowed, and it has been hovering at a low level. Since November 2018, the price of organosilicon products has been in a downturn. Although the price of organosilicon products has risen sharply from 1820 yuan/ton in mid-February to 21400 yuan/ton in February 2019, driven by the traditional small peak season, the price of organosilicon products has declined sharply compared with the same period last year. In the first half of 2019, D4 and DMC decreased by 37% and 39%, raw rubber and 107 rubber by 37% and 38%, and mixed rubber and dimethyl silicone oil by 21% and 37% respectively.


Converted from Chinese Adhesives and Adhesive Tapes