In addition to the recent double control policy, the development of the past few years is now a big help to accumulate.
Monitoring data show that the mainstream silicone DMC market quotation compared with the beginning of September, has risen nearly 20,000 yuan/ton, up more than 50%, a 10-year high. Some domestic silicone key production enterprises have announced that the supply of silicone series of products to adjust the limit, and the price of the corresponding products to be about 20%.
In the silicone price continues to rise, A shares of the silicone plate also ushered in A soaring market. It is reported that this year, the largest increase of silicone plate more than 100%, some leading enterprise shares are up three times, it can be seen that the market is very optimistic about the silicone market prospects.
Data shows that silicone products are of numerous types and widely applied, with about 8,000 varieties applied in various industries, known as "industrial MONOsodium glutamate", and its downstream demand is concentrated in construction, electronics, electricity and new energy industries.
China is now the world's largest producer of industrial silicon. In 2020, the total industrial silicon production capacity of China was 5.06 million tons, accounting for 78% of the global total. According to statistics, China's annual production capacity of organic silicon monomer reaches 3.325 million tons. Last year, the organic silicon industry consumed 660,000 tons of industrial silicon, up 4.7% year on year, accounting for 40.2% of the total domestic industrial silicon consumption.
Since 2017, China has initiated the supply-side reform of industrial silicon in order to lay out carbon neutrality planning and overall environmental protection governance requirements. A large number of coal, electricity and silicon integration projects in Xinjiang have been suspended and postponed, while high-cost production capacity in central and western China, such as Sichuan and Guizhou, has also been accelerated. By the end of June 2021, China's effective industrial silicon capacity stood at 4.99 million tons, down 6.6 percent from the 2018 peak.
Some industry analysts said that China's industrial silicon capacity is expected to increase by 500,000 tons in 2022, with the capacity increasing by less than 10%. Due to the control of environmental protection and energy demand, all producing areas will strictly control the total industrial silicon capacity, and promote capacity replacement and continuous clearance of backward capacity.
However, capacity growth is limited. Statistical data show that the capacity of silicone monomer DMC in 2021 is 1.875 million tons, with a compound annual growth rate of 10.5% from 2018 to 2021. The downstream is mainly used for polymerization production of silicone rubber, silicone oil, silicone resin and so on. It is estimated that the annual production capacity of 21-22 will increase by 400,000 to 500,000 tons, an increase of about 24% year-on-year.
Demand for silicone also continues to grow, so prices continue to rise. Due to the continuous compression of total production capacity at the supply end and the rapid growth of the demand end in the silicone field, the mismatch between supply and demand of the industrial chain may continue to intensify.