China's Silicone Industry Will Grow Fast in the Next Five Years   

By China Association of Fluorine and Silicone Material Industry

The top five silicone producers in the world today are Dow Corning (USA), Momentive (USA), Wacker (Germany), Shin-Etsu (Japan) and China National Bluestar. These five companies possess more than 70% of the world's total silicone capacity. In 2010, the global silicone capacity was 4.3 million t/a, of which China's had 1.7 million t/a (850 000 t/a if converted to 100% siloxane) or 39.5%. In 2010, global silicone output was 3.2 million tons, and its growth mainly occurred in China.
   With the development of the construction, electrical and electronic, automotive, cosmetics and textile industries, consumption of silicone products has grown fast in China in recent years. In 2010, China's production capacity of silicone (converted to 100% siloxane; the hereinafter the same) was 850 000 t/a, the output was about 450 000 tons, and domestic consumption was 555 000 tons (sales value exceeding RMB20 billion). In the past decade, the country's silicone consumption has increased more than eight fold, with an average annual growth rate of 23.4%, far higher than the global average or that of other countries and regions. In 2011-2015, China's silicone consumption will grow about 18% annually. In 2015, the country's apparent consumption of silicone (100% siloxane) will reach about 1.3 million tons, equivalent to about 2.6 million tons of organic silicon monomers. In China, silicone rubber is mainly used in the construction, electronics, automobiles and machinery industries. Silicone oil is mainly used in the textile and cosmetic industries.

1. Demand for silicone will grow fast in China

1) High-temperature vulcanized (HTV) silicone rubber

HTV silicone rubber is mainly used in electronic appliances, office automation equipment and automotives, especially in making pushbuttons for electronic equipment. It also has good application prospects in power cables, nuclear power plants and shipbuilding. It has increasing applications in home appliances, kitchen utensils and jewelry accessories. In the medical field, it has been successfully used in a variety of artificial organs and simulated biological materials. In 2010, China's production capacity of raw HTV silicone rubber reached 350 000 t/a. In 2006-2010, the country's consumption of HTV silicone rubber grew more than 20% annually. With the vigorous development of the above industries, new uses of HTV silicone rubber have been constantly developed, and the demand for it will keep growing rapidly. The demand for HTV silicone rubber in China is expected to reach more than 900 000 tons in 2015, growing about 25% annually from 2011 to 2015.

2) Room temperature vulcanization (RTV) silicone rubber

RTV silicone rubber is mainly used as a sealant in the construction industry. In recent years, with the rapid development of urban construction, the demand for the silicone construction sealant has grown rapidly in China. In 2010, China's production capacity of TRV silicone rubber reached 500 000 t/a, and its consumption was about 400 000 tons. With the development of China's urbanization and urban and rural construction, the demand for silicone sealants will continue to increase, reaching 800 000 tons in 2015, after growing about 15% annually.

3) Silicone oil

In 2010, China's silicone oil consumption was about 150 000 tons, half of which was domestically made. Along with the rapid development of HTV silicone rubber and RTV silicone rubber, the demand for methyl silicone oil and hydroxy silicone oil has also been growing fast. China is the world's largest producer of textiles, and silicone oil is widely used in the textile industry. China's demand for silicone oil will reach 400 000 tons in 2015 and grow 22% annually in 2011-2015.

4) Silicone resin

Silicone resin accounts for a small proportion of the whole silicone market. China consumed about 16 000 tons in 2010, accounting for 3% of the country's total silicone consumption. The demand will reach 50 000 tons in 2015, and its proportion of the nation's silicone consumption will have risen to 4%.

5) Silane coupling agents and cross-linking agents

China's rapid economic development has stimulated the demand for silane products. And the country's export of silane products has also increased substantially in recent years. These factors made China's consumption of silane coupling agents and cross-linking agents increase rapidly from 25 000 tons in 2005 to 120 000 tons in 2010, growing 37% annually in the past five years. It will reach 400 000 tons in 2015 after growing about 27% annually.

6) Fumed silica

60%-70% of fumed silica is used in silicone rubber, about 9% is used in the coatings industry, and about 6% is used in the polyester industry. The demand for fumed silica in China was about 36 000 tons in 2010. It will reach 90 000 tons in 2015 after growing 20% annually.
   The consumption of the above products in China in 2010 and 2015 is listed in Table 1.

Table 1 Consumption of various silicone products in China   (thousand tons)
Product    2010    2015E    Annual grow rate in 2011-2015
HTV silicone rubber    350    900    25%
RTV silicone rubber    400    800    15%
Silicone oil    150    400    22%
Silicone resin    16    50    4%
Silane coupling agents and cross-linking agents    120    400    27%
Fumed silica    36    90    20%

2. Analysis of demand for silicone products in various areas

1) Traditional industries

The construction, automotive, electronics, textile and daily chemical industries are traditional application areas of silicone and are currently the largest consumers of silicone. They will remain major application areas for the foreseeable future. In 2010, China's automobile production and sales both exceeded 18 million units. In any new car, dozens of parts incorporate silicone, requiring 1.5-3 kg on average. China's automotive industry consumed about 25 000 tons of silicone in 2010 and will consume 80 000 tons in 2015.
   In 2010, the total size of China's skin care market was up to US$8.7 billion. Due to its excellent physical, chemical and physiological properties, silicone oil has become an important ingredient of cosmetic and skin care products. In China, the consumption of silicone oil in this area now exceeds 20 000 tons, accounting for about 20% of the total silicone oil consumption. In the future, the consumption of silicone in this area will grow faster than in other areas.
   Due to its excellent overall performance, silicone oil has become an indispensable auxiliary in textiles, printing and dyeing. With the rapid development of the textile industry, the consumption of silicone oil in this area will continue to increase.

2) Strategic and emerging industries

In 2010, China's crystalline silicon cell output reached 8.5GW, more than 50 percent of the global total. Adding in the demand for silicone in making LEDs and wind power equipment, it is estimated that China's new energy industry consumed about 15 000 tons of silicone materials in 2010. According to the "12th Five-Year Plan" for renewable energy, China's total installed capacity of photovoltaic (PV) power generation is expected to reach 10GW in 2015. Plus exports, it is estimated that C