Silicone Rubber Material News This Week

The major raw rubber companies maintained the price of 30,500 yuan/ton unchanged. Manufacturers said that in the first quarter, the profit growth rate of the silicone industry chain further declined. The epidemic is the biggest disturbance at present.

However, the inflection point for the improvement of raw rubber fundamentals is expected to be approaching, and the negative impact of external factors (Russian-Ukrainian conflict, Fed rate hike, global inflation) has weakened. The profit growth rate of the silicon industry continued to decline, the performance differentiation of the first and last companies intensified, and the profits of small companies declined; second, the differentiation of the mid-stream and downstream sectors was further intensified.

The industry said that the upstream raw rubber is highly concentrated and the downstream is scattered, and the unequal market position has led to a weak position in the raw rubber pricing power of domestic rubber compounding enterprises, and they can only passively accept the fluctuation of raw rubber prices. Trend data shows that it is not sustainable for the downstream to rely only on traditional rubber compounds to walk on one leg. And from the perspective of the layout of the silicone industry, the extended layout of functional differentiation is a way out.

Last year, raw collagen materials rose in turn, which had a certain impact on the production and operation of mid-stream and downstream enterprises in silica gel, and also put pressure on enterprises. Compared with large-scale enterprises, small and medium-sized silicone enterprises have been hit harder. With the sharp rise in the price of raw materials, small silicon product enterprises that had previously relied on low-price competition to survive have gradually lost their price advantage, and their survival has become more and more difficult.

Therefore, in addition to relieving pressure through continuous improvement of operational efficiency and structural price increases, mid-stream and downstream enterprises in silicone should pay more attention to innovation and research and development. The added value and services to adapt to the market, rather than fighting price wars blindly.

Famous big names in the industry believe that in the future, silicones must be the top priority, and the guarantee of profits is particularly important. Now the upstream material capacity is increasing, and the release of these capacity should take 2 to 3 years from this year. After 2 to 3 years, the new production capacity of raw materials will be released centrally. By that time, the raw material dividends of the middle and downstream enterprises of silicone are expected to come. But how many mid-stream and downstream enterprises can survive the cold winter of 1 to 2 years, the leftover is the king.