Silicone: Big risk of large-scale expansion

A few days ago the newspaper reported that the silicon product polysilicon project has launched into the news. Coincidentally, in the past two years, another silicon-based product, a silicone project using chemical grade silicon metal, has also been launched across the country. These projects are actually methyl chloride silanes, the basic raw material needed to produce various silicone products. China's famous organic silicon material expert Fu Jiyu appealed that there is a great risk of large-scale expansion of silicone projects.
It is understood that by 2006, the methylchlorosilane plants that have been completed or started trial production or put into operation include Lanxing Chemical New Materials Co., Ltd. Jiangxi Xinghuo Chemical Plant 100,000 tons/year, Jiangsu Meilan Chemical Group Co., Ltd. and Jiangsu Hong Each of the new material company's 30,000 tons/year installations. Before the start of 2010, there will be a 100,000-ton/year plant wholly owned by Zhejiang Xin'an Chemical Industry Group Co., Ltd., Zhejiang Hesheng Chemical Co., Ltd., Zhejiang Zhongtian Fluorine Silica Materials Co., Ltd., Sichuan Sifeng Organic Silicon Material Co., Ltd., Shanxi Sanjia Chemical New Material Co., Ltd., Shandong Jinling Group and Other companies each have 60,000 tons/year of organic silicon devices, and 400,000 tons/year of Blue Star (Tianjin) Chemical Co., Ltd. and Shandong Dongyue Chemicals. The company's project. In addition, there are Tangshan Sanyou Group and others for the proposed silicone project. The total number of projects is more than 10, and the total investment exceeds 10 billion yuan.
According to the prediction of experts, by 2010, the domestic production of methylchlorosilane will reach 1.5 million to 1.7 million tons. In addition to the multinational company's sole proprietorship and joint venture projects, the production capacity of methylchlorosilane in China will exceed 2 million tons. Therefore, the industry figures metaphorically, if it really becomes a reality, when China's methylchlorosilanes like a flash flood, its output will exceed the United States Dow Corning, the United States, and the United States Motuo Advanced Materials Group (formerly the United States GE's high-tech materials group) and Germany's WACKER's total production.
According to reports, most of the projects that China has launched and called organic silicon at present are actually methylsilyl chloride monolithic units with an annual production capacity of 60,000 tons. Most of them lack the downstream products that they support. Most of them lack a strong source of technology. And support. Most of these projects cannot produce upstream raw materials, nor can they produce a large number of downstream products with high added value, and do not belong to integrated integrated projects with a relatively complete silicon product industrial chain or silicone product tree. That is to say, the products produced by these projects are mainly used as intermediate raw materials for other plants, such as cyclosiloxane, dimethyl siloxane, and simple processed primary products, such as 107 glue. Therefore, the risks of these silicone projects that are now being launched are imaginable.
According to the analysis, the large gap between supply and demand and the large amount of imports are the reasons that caused the silicone project to “fever” in China. Some experts reminded us to calmly look at the gap between supply and demand and massive imports.
First, multinational corporations have built a number of large-scale downstream deep processing projects in China to expand their market share. Take the example of the former US GE High-tech Materials Group, there are four factories in China, and the scale of its Nantong plant is 20,000 tons/year. Multinational corporations quickly entered the downstream product areas, making the situation of dimethylsiloxane in short supply in the market unabated. Over the past three to four years, more than 100,000 tons were imported annually. Although the organosilicon industry in China has made considerable progress in recent years, the increase in the production of methylchlorosilane monomer is not too slow, but it still cannot change the situation in which dimethylsiloxane is imported in large quantities every year. However, industry insiders stressed that this situation is not indefinite and permanent and there will be a day of change and termination.
Second, it is necessary to analyze in depth the profitability of silicone companies. Multinational companies have no secret that a large part of their sales revenue comes from Asia, and China accounts for half of them. It is worth noting that multinational corporations do not primarily rely on sales of intermediate raw materials that have not been deep-processed, but rely on profitable products with high added value.
It is understood that by 2010, multinational corporations will be able to continue to earn considerable profits in China by virtue of their low cost advantage after localization, strong technical support and rich sales experience. But at that time, the price of dimethyl siloxane will inevitably be affected by the market. Especially after more than 400,000 tons of methylchlorosilane plant at Zhangjiagang base of Dow Corning and Germany WACKER have been put into production, the current high price of around 30,000 yuan/ton will become history, and even some common downstream products will be full of risks. If you do not rely on a reasonable silicone product tree and a distinctive product system, the risk is even greater. Blindly “bigger” rather than “strengthening” quickly, relying only on some elementary, similar downstream varieties to compete with others, the future can be imagined.
Some entrepreneurs do not seem to worry about more than 2 million tons of methylchlorosilanes in the Chinese market. They believe that after China becomes a big producer of organic silicon, a large amount of dimethyl siloxane can be exported and go abroad. Industry insiders reminded that neither the Chinese market nor the world market will be infinitely large. At the same time, under the current background of energy conservation and emission reduction, it is not ruled out that the country will issue corresponding measures. By that time, the prospect of disguised export of dimethylsiloxane, which consumes energy and resources, is hard to say.

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