Organic silicon, that is, an organic silicon compound, refers to a compound containing a Si-C bond and at least one organic group is directly connected to a silicon atom. It is customary to use organic compounds such as oxygen, sulfur, and nitrogen to make organic groups and silicon atoms. The linked compounds are also regarded as organosilicon compounds. Among them, polysiloxanes with a silicon-oxygen bond (-Si-O-Si-) as the skeleton are among the most organosilicon compounds, the most deeply studied and the most widely used, accounting for more than 90% of the total amount .


Organic silicon production capacity and output


In the past ten years, the trend of the global shift in organic silicon production capacity to China has been obvious. China has become a large country in the production and consumption of organic silicon. The advantages of domestic organic silicon products have become increasingly prominent, and the import substitution effect has been significant. According to SAGSI statistics, as of 2018, China has a total of 13 methyl monomer production enterprises (including the Dow-Wacker Zhangjiagang plant), with a total silicone production capacity of 1.42 million tons / year (in production capacity of 1.307 million tons / year ), The output was 1.13 million tons, an increase of 2.83% and 10.68% year-on-year, and the average annual compound growth rates of 2008-2018 were 19.41% and 19.21%, respectively. The industry has developed rapidly. According to SAGSI's forecast, China's total polysiloxane production capacity will reach 1.96 million tons per year in 2023, with an output of 1.7 million tons. The average annual growth rates during 2018-2023 will be 6.73% and 8.51%, respectively.




Data source: SAGSI, China Business Industry Research Institute


From 2008 to 2010, the rapid expansion of China's organic silicon new projects, the industry's production capacity has exploded, coupled with the large gap between domestic companies' technological level and foreign countries, leading to a significant decline in the industry's capacity utilization during the period. Since then, domestic production capacity has entered a modest expansion phase. With the gradual digestion of excess production capacity, industry technological progress, and the improvement of enterprise process management levels, the industry's capacity utilization rate has continued to rise. As of 2018, the utilization rate of polysiloxane capacity in China has reached 80%, an increase of 6 percentage points from 2017, and the highest level in nearly ten years. It is expected that by 2023, China's polysiloxane capacity utilization rate will further increase to 87%.




Data source: SAGSI, China Business Industry Research Institute


Silicone consumption


From the demand side, the demand for organic silicon products in China has been strong in the past ten years, and the demand has maintained rapid growth. According to SAGSI statistics, in 2018, China's apparent consumption of polysiloxane (production + net imports) reached 1.04 million tons, a year-on-year increase of 7.41%, and the average compound growth rate in 2008-2018 reached 11.14%. With the gradual progress of China's economic transformation, the rapid increase of residents' income levels, and the steady implementation of the national strategy of "Made in China 2025" and the "Belt and Road", SAGSI expects that China's polysiloxane consumption will continue to grow at a medium and high speed. During 2023, the average annual growth rate will be 8.36%, and by 2023 consumption will reach 1.56 million tons.




Data source: SAGSI, China Business Industry Research Institute


Silicone is a class of high-performance new materials with excellent performance, diverse forms, and wide use. With the development of the national economy and the continuous improvement of people's living standards, silicone products have demonstrated their superior performance and played a role in more and more fields. , Gradually realize the replacement of traditional materials, and the scope of application continues to expand.


In 2018, China's apparent consumption of polysiloxane was 1.04 million tons, of which the largest proportion of consumption was in the fields of construction, electronics, electricity and new energy, medical and personal care. It is expected that in the next 5 years, among the many downstream applications of organic silicon, construction, electronics, textiles, personal care, etc. will still be the main application areas of organic silicon materials; the energy-saving and environmental protection industries such as photovoltaics and new energy will have a market for organic silicon materials. Demand will maintain medium-to-high-speed growth; ultra-high and ultra-high-voltage power grid construction, 3D printing, smart wearable devices, and other emerging areas will be one of the future market growth points and breakthrough points for silicone materials; in addition, silicone materials will be important for national major projects It is irreplaceable, mainly high-reliability, high-stability, high-performance special silicone materials. Although the amount is not large, there are many types, high technical requirements, and optimistic future development prospects.




Note: Other fields are widely used, including pesticides, creative kitchenware, high-speed rail, 3D printing, etc.


Data source: SAGSI, China Business Industry Research Institute


Import and export of organic silicon


Prior to 2008, China's organic silicon market demand increased rapidly, and its products mainly depended on imports. Since then, with the rapid expansion of domestic production capacity, the domestic organic silicon technology has gradually matured, the domestic quality has been continuously upgraded, the domesticization process of organic silicon has been rapidly promoted, the import volume of organic silicon has continued to decline, and the import substitution effect has been significant. At the same time, as the world's production capacity shifts to China's domestic market, local superior companies have gradually expanded overseas markets, and China's organic silicon exports have continued to grow rapidly.


According to Chinese customs statistics, the export volume of polysiloxanes in China's primary form increased from 34 thousand tons in 2008 to 264,000 tons in 2018, with an average annual compound growth rate of 22.79%. In the same period, imports fell from 217,000 tons to 120 million tons, a decrease of 44.60%. In 2014, China's primary shape polysiloxane achieved net exports for the first time. In 2018, net exports reached 143,700 tons, a year-on-year increase of 55.66%.




Data source: sorted by China Customs, China Business Industry Research Institute


Competitive landscape of the organic silicon industry


Organic silicon is a typical capital and technology-intensive industry, and has been monopolized by a few foreign companies for a long time. But since the beginning of the 21st century, with the rise of Chinese companies, the market structure has gradually changed. The proportion of Chinese companies in the market has increased rapidly, while the proportion of foreign companies has gradually declined.


From a global perspective, the supply pattern of the organic silicon market is relatively concentrated. Multinational companies rely on their strong R & D capabilities, advanced production technology, outstanding brand advantages, and good product performance to occupy the market advantage. According to SAGSI statistics, the global polysiloxane production capacity in 2018 was approximately 2.548 million tons / year, of which the five largest multinational manufacturers (US Dow, German WACKER, China Bluestar Group, Shin-Etsu, Japan Momentive) global polysiloxane The total production capacity of alkane is about 1.467 million tons / year, accounting for 57.6% of the global total production capacity. The remaining producers mainly include Hesheng Silicon, Xin'an, Dongyue Silicon, Hengyecheng, etc.




Data source: SAGSI, China Business Industry Research Institute


China's organic silicon industry has a relatively high degree of marketization. The main players in the market include state-owned enterprises, private enterprises, and foreign-funded enterprises. From the perspective of domestic market share, although local enterprises have made great progress in monomer production, domestic companies' products are mostly primary deep processing products such as 107 rubber, 110 raw rubber, and mixed rubber. High-end downstream products still have few specifications, For low-grade issues, foreign brands have obvious advantages in the downstream high-end market. According to statistics, the production value of polysiloxanes per ton of multinational companies such as WACKER in Germany and Shin-Etsu in Japan is US $ 7,200 ~ 9,400, which is about twice that of major domestic monomer production enterprises.


The development of China's organic silicon industry has the characteristics of centralized production of organic silicon monomers, scattered and deep processing of products downstream in the industrial chain, and obvious distinctions between upstream and downstream. As of 2018, there are 13 methyl monomer production enterprises in China (including the Dow-Wacker Zhangjiagang plant), which are located in 9 provinces and autonomous regions in the country. The production scale of individual enterprises is relatively large and the regions are relatively concentrated. In 2018, the total production capacity of the top 5 methyl monomer companies in China accounted for about 60% of the country's total production capacity, and the concentration of production capacity has further increased. There are a large number of enterprises in the downstream deep processing of organic silicon in China, and small and medium-sized enterprises are mainly engaged in the production of low-end and homogeneous products. The industry structure is relatively scattered.


Compared with overseas markets, China's current production of organic silicon products, especially downstream products, is still relatively scattered. In the future, the production of organic silicon monomers in China will continue to be concentrated in enterprises with advantages in scale, technology, cost and products, and the industry's competition structure will be further optimized. At the same time, while domestic large-scale monomer enterprises expand production and increase efficiency, they will continue to improve the layout of the integrated upstream and downstream industrial chain, vigorously develop downstream products and high value-added products, backward downstream, homogeneous production capacity will accelerate withdrawal, industry concentration Expect rapid improvement.


Development prospects of the organic silicon industry


1. National industrial policy support


Organic silicon is a high-performance new material and an important part of the strategic emerging industry new material industry. It has been published in the "High-tech Product Catalog (2006)" of the State Council's ministries and commissions over the years. (2011), "Twelfth Five-Year Plan for New Materials Industry Development", "Industrial Structure Adjustment Guidance Catalogue (2011 Edition) (Amended)", "Encouraged Import Technology and Product Catalogue (2015 Edition)", "Petrochemical and Chemical Industry Development Planning (2016-2020), New Material Industry Development Guide, Strategic Emerging Industry Key Products and Services Guidance Catalogue (2016 Edition), Three-year Action Plan to Enhance Manufacturing Core Competitiveness (2018-2020), and In the Strategic Emerging Industries Classification (2018) and other policy documents, silicone materials have been listed as new materials to encourage development.


In 2015, the State Council issued "Made in China 2025" and seven strategic emerging industries, and listed new materials as one of the strategic areas for breakthrough development. In order to point out the development trends and development priorities of key areas and guide the innovation activities of enterprises, in January 2018, the National Manufacturing Power Construction Strategy Advisory Committee and other organizations compiled a roadmap for technological innovation in key areas of "Made in China 2025" (2017), which clearly stated Put forward the key development of silicone rubber, silicone oil, silicone resin, etc., which fully illustrates the importance of organic silicon materials to the development of the national economy.


2. Wide market demand for downstream applications


In the past ten years, China's organic silicon materials have maintained a high-speed development momentum driven by market demand. From 2008 to 2018, the average annual compound growth rate reached 11.14%, which is much higher than the growth rate of other countries and regions. The main driving force for the development of the silicon industry. Although the current consumption of organic silicon in China has reached 50% of the total global consumption, there is still much room for improvement in per capita consumption. According to statistics, China's per capita consumption of organic silicon is currently about 0.7kg, while developed countries and regions such as Western Europe, North America, Japan, and South Korea are close to 2.0kg.


Silicones have low dependence on oil and natural gas, making them ideal substitutes for petroleum-based synthetic materials. Accelerating the substitution of organic silicon for petroleum-based synthetic materials has both broad market prospects and strategic significance. In the future, with the gradual advancement of China's economic transformation, the rapid increase in residents' income levels, and the steady implementation of the national strategy of "Made in China 2025" and the "Belt and Road", it is expected that China's consumption of polysiloxane will continue to remain in the next five years. High-speed growth, reaching 1.560 million tons by 2023, with an average growth of 8.36% in 2018-2023.


Among the many downstream applications of organic silicon, construction, electronics, textiles, personal care, etc. will continue to be the main application areas of organic silicon materials; the market demand for organic silicon materials by energy-saving and environmental protection industries such as photovoltaics and new energy sources will remain at high and medium speeds Growth; UHV and UHV power grid construction, 3D printing, smart wearable devices and other emerging areas will be one of the future market growth points and breakthrough points for silicone materials; In addition, silicone materials are irreplaceable for major national projects, Mainly high-reliability, high-stability, high-performance special silicone materials. Although the amount is not large, there are many types and high technical requirements. The future development prospects are optimistic.


3. Export prospects continue to improve


In recent years, with the increase of China's organic silicon production capacity and the improvement of product quality, China has become the world's major producer and export market of organic silicon. In 2014, China ended its long-term dependence on imports of silicone-based polymers and became the first-time net exporter of polysiloxanes. From 2008 to 2018, the import volume of China's primary shape polysiloxanes decreased by 44.60%, while the export volume increased by 6.79 times.


In 2018, China's net export of polysiloxane in primary form reached 143,700 tons, a year-on-year increase of 55.66%. It is expected that in a long period of time in the future, the net export scale of China's organic silicon products will maintain a rapid growth trend, which is mainly due to the following factors: First, the size of the global organic silicon market continues to expand. It will maintain an average annual growth rate of 5.85%. Second, affected by factors such as raw materials, costs, and markets, overseas production capacity has grown slowly, and global production capacity has shifted significantly to China. Third, China's organic silicon industry has gradually occupied an advantageous position in global competition.