As the Chinese New Year bell is about to ring, the silicone market has quietly entered a closed rhythm. Despite the strong holiday atmosphere in the market, a news from giant Wacker Chemie is like a clear stream, bringing new vitality to the market. Recently, Wacker Chemie AG announced the official launch of two new specialized silicone production plants in Tsukuba, Japan and Cheongju, South Korea, with a total investment of tens of millions of euros. This move will undoubtedly have a profound impact on the future pattern of the silicone market.
The new factory in Tsukuba focuses on producing silicon-based thermal interface materials (TIM), which have broad application prospects in the field of electric vehicles. With the booming development of the electric vehicle market, the demand for efficient heat dissipation materials is increasing day by day, and the TIM production line put into operation by Wacker perfectly meets this trend. This material is essentially an organic silicon elastomer, which has been specially mixed with various additives and fillers to improve thermal conductivity, making it an ideal heat dissipation gap filling material for cooling power electronic devices and traction batteries in electric vehicles. Through its joint venture with Asahi Kasei, Wacker Asahi Kasei Organic Silicon Co., Ltd. not only produces specialty organic silicon products in Tsukuba, but also has an organic silicon application technology center and training base to provide comprehensive technical support and services to Asian customers.
In Cheongju, South Korea, Wacker further strengthened its leading position in the field of silicone sealants. Since 2010, the Qingzhou factory has been producing silicone sealants for the construction industry, gradually expanding to the production of special silicone, liquid silicone rubber, and silicone elastomers for the automotive and electrical industries. Although the production capacity of silicone sealant has expanded after relocation in 2018, the factory's production capacity is approaching its limit in the face of growing market demand. The launch of this new production line will effectively alleviate this pressure, making the Qingzhou factory one of the largest, most modern, and efficient production bases for silicone sealants in Asia.
Christian Kirsten, a member of the Executive Board of Wacker, said, "The new production capacity will help us meet the growing demand, especially in the local automotive and construction industries." He further pointed out that the new production lines in Tsukuba and Cheongju are in line with Wacker's strategy of deploying production capacity in areas close to local customers. This strategy not only helps to shorten delivery cycles and improve customer satisfaction, but also better grasps market dynamics and flexibly adjusts production plans.
During the Spring Festival, although the organic silicon market has fallen into a closed state, downstream enterprises still have urgent small purchases to follow up. Due to reduced logistics capacity, most downstream enterprises are purchasing in advance to ensure production demand during the Spring Festival period. Individual factories, on the other hand, focus on delivering pre-sale orders in the early stages, maintaining a balanced supply and demand situation in the overall market. However, due to the delisting and holiday of many downstream terminal enterprises, the supply side of individual factories still maintains a relatively strong operation, and some orders still have discounts in actual negotiations. This week, individual factories in Shandong have lowered their quotes by 200 yuan/ton, while DMC and D4 have both quoted 12600 yuan/ton. Other individual factories have more confidence in raising prices, and the overall market transaction center is stabilizing.
Looking ahead to the post holiday market, it is expected that the silicone market will have a good start. With the commissioning of the new Wacker plant and the sustained growth in demand for silicone materials in the Asian automotive and construction industries, the silicone market will usher in new development opportunities. Meanwhile, with the end of the Spring Festival holiday, downstream enterprises will gradually resume work and production, and market demand will gradually recover. Under the joint promotion of supply and demand, the organic silicon market is expected to usher in a new round of upward trend.