The countdown to the Spring Festival is three days! The organic silicon market has entered a closed state. Specifically, currently there is a strong holiday atmosphere in the venue, and everyone is not interested in trading. Downstream enterprises are even on vacation, and overtime production has average market demand. However, downstream enterprises still have urgent needs for small purchases to follow up, and due to reduced logistics capacity, most downstream enterprises are purchasing in advance, while individual factories are mainly delivering pre-sale orders in the early stage, maintaining a balance between overall market supply and demand. Overall, due to the delisting and holiday of many downstream terminal enterprises, and the continued strong operation of the supply side of individual factories, it is expected that some orders will still have discounts in actual negotiations. Shandong individual factories have lowered their quotes by 200 yuan this week, and DMC and D4 have both quoted 12600 yuan/ton. Other individual factories have strong confidence in raising prices, and the overall market transaction center is stabilizing. It is expected that the organic silicon market may have a good start after the holiday. As of January 24th, the mainstream quotation for DMC is 12600~13500 yuan/ton; The quotation for chemical grade 421 # metal silicon on the raw material side is 11400~12200 yuan/ton; The quotation for chloromethane in Shandong region is 2300 yuan/ton.
In terms of operating rate: Due to sufficient pre-sale orders, it is expected that individual factories will continue to operate at a relatively high level during the Spring Festival period. However, some units in central China have recently started maintenance, which has slightly eased the supply side. In the short term, the inventory pressure of individual factories is not significant, and the overall operating rate will remain above 70%.
On January 23rd, Wacker Chemie AG announced the launch of two new specialty silicone production plants in Tsukuba, Japan and Cheongju, South Korea this week. The announcement released by Wacker stated that this expansion will meet the growing demand of the Asian automotive and construction industries, with a total investment of tens of millions of euros. In Tsukuba, Wacker has launched a new production line for the production of silicon-based thermal interface materials (TIM). This material is applied in the field of electric vehicles, such as used as a heat dissipation gap filling material for cooling power electronic devices and traction batteries. TIM products are essentially organic silicone elastomers, with various additives and fillers added during the mixing process to improve their thermal conductivity.
Christian Kirsten, a member of the Executive Board of Wacker responsible for the group's silicone business, said, "The new production capacity will help us meet the growing demand, especially in the local automotive and construction industries." In Japan, Wacker produces specialty silicone products in Tsukuba through a joint venture with Asahi Kasei, and also has a silicone application technology center and training base in the area. In South Korea, the Wacker Cheongju factory has been producing silicone sealants for the construction industry since 2010, and has been producing specialty silicone, liquid silicone rubber, and silicone elastomers for the automotive and electrical industries since 2012. Wacker stated that although the production capacity of silicone sealant has expanded after the relocation of its Korean factory in 2018, the growing demand has pushed the factory's production capacity to its limit. Kirsten stated that the Qingzhou factory currently has one of the largest, most modern, and efficient production bases for silicone sealants in Asia. Angela Wall, a member of the Executive Board of Wacker responsible for business in Asia, added, "The new production lines in Tsukuba and Cheongju are in line with our strategy of deploying production capacity in areas close to local customers." According to Wacker, over 40% of the group's sales come from Asia, with Japan and South Korea making the main contributions to its sales in Asia.