Integrated Product Chains to Improve Market Competiveness of HTV Silicone Rubber

By Tian Guopeng, CNCIC China Silicon Material Information Research Center

Among the many polymers that contain silicon, carbon, hydrogen and oxygen, silicone rubber has the largest output and the widest applicability. Once vulcanized, silicone rubber resists low temperatures, high temperatures, weather aging, and water, as well as being an electric insulator. It also has other advantages such as physiological inertia. Therefore, silicone rubber is widely used in industries like national defense, healthcare, pharmaceuticals and agriculture, and it has become one of the important new polymer materials.
Based on vulcanization temperature and method, silicone rubber can be divided into three categories: HTV (high-temperature vulcanized) silicone rubber, RTV (room-temperature vulcanized) silicone rubber and ALSR (additional liquid silicone rubber). Major varieties of HTV silicone rubber include dimethyl silicone rubber, vinyl methyl silicone rubber (VMQ), phenyl vinyl methyl silicone rubber (PVMQ) and fluorosilicone rubber, among which VMQ is the most commonly used. Normally, HTV silicone rubber is vulcanized with additives (reinforcing fillers, extenders, structured control agents and other additives) to form a compound.

Domestic capacity expanded dramatically

Over the past ten years, HTV silicone rubber has developed rapidly in China, and its application has expanded due to its excellent properties, such as resistance to high/low temperatures, weather aging resistance, electrical properties, gas permeability and physiological inertia. From 2002 to 2013, the average annual growth rate of the capacity for HTV silicone rubber in China was 20.1%, and the growth of output was 18.5%. As of the end of 2013, there are over 30 HTV silicone rubber producers in China with a total capacity of 450 kt/a. The overall operating rate of these producers in 2013 was 72.2%.
Table 1 shows the major HTV silicone rubber producers in China, most of which are located in East China and South China. With a relatively complete industrial chain, Jiangsu Hongda New Material Co., Ltd. has been in a leading position among China’s HTV silicone rubber producers. In the future, producers with a small production scale and a low technology level will be gradually phased out.
In recent years, with improvement of technology and expanding demand, two HTV silicone rubber production bases have been formed in the Yangtze River Delta and the Pearl River Delta respectively. Domestic capacity will continue to grow in the next few years. Reportedly, there are about ten new HTV silicone rubber projects under construction or in planning. In 2014, the estimated supply gap of HTV silicone rubber in China was about 10 kt, with low-end varieties being in surplus and mid-market and high-end products being in short supply.

Table 1   China’s major HTV silicone rubber producers in 2013 (kt/a)

Company    Location    Capacity (compound)
Dongjue Silicone (Nanjing) Co., Ltd.    East China    60
Jiangsu Hongda New Material Co., Ltd.    East China    80
Dow Corning (Zhangjiagang) Silicone Co., Ltd.    East China    50
Zhejiang Xinan Chemical Industrial Group Co., Ltd.    East China    42
Zhejiang Hoshine Silicon Industry Co., Ltd.    East China    15
Shin-Etsu Silicone (Nantong) Co., Ltd.    East China    12
Midgold Fine Performance Materials (Shenzhen) Co., Ltd.    South China    10
Zibo Huaxing Silicone Material Co., Ltd.    East China    10
Yanzhou Chenhua New Materials Co., Ltd.    East China    10
Zhejiang Fushite Silicone Co., Ltd.    East China    10


Demand will continue
to increase

In China, HTV silicone rubber is mainly used to produce conductive buttons, wires and cables, insulators, kitchen supplies, medical equipment, automobile parts, etc. It is also widely used in the aerospace industry. The apparent consumption of HTV silicone rubber in China in 2013 was 315 kt, up 22.1% year-on-year.
(1) Cables and wires. Cable accessories made from HTV silicone rubber include heat shrinkable products, cold shrinkable products, flame-retardant products, prefabricated products, etc. These products have been widely used in fields with special conditions, such as the construction of the railway to Tibet. Meanwhile, a number of professional companies represented by Shenzhen Changyuan New Material Co., Ltd. emerged in this field. In 2013, the domestic consumption of HTV silicone rubber in making cables and wires were 70 kt, accounting for 22% of the domestic total consumption. In the future, with the development of construction and special equipment industries, the consumption of HTV silicone rubber in this field is estimated to increase 8% each year.
(2) Electrics and electronics. Due to China’s low labor costs compared to developed countries, the country has become a labor-intensive mass production base for molded products such as buttons used in electric and electronic products. In 2013, China’s consumption of HTV silicone rubber in this area was 65 kt, 21% of the domestic total. However, consumption in this area is expected to decrease gradually for two reasons – with the transformation of China’s economic structure and the ever-increasing labor costs, many producers of molded product are relocating to countries with lower labor costs and the traditional buttons of electronic gadgets and electric appliances have been gradually replaced by touch screens.
Since 2009, OEM electronic producers have been relocating production facilities from China’s coastal regions to inland areas due to increasing labor costs. For instance, Foxconn has relocated its major production bases to Chongqing and Henan. It is estimated that from 2011 to 2015, the output of portable electronic devices through OEM production in Middle China and West China will reach 700 million, of which 200 million will be in the Sichuan Basin and the other 200 million will be inland in North China. Therefore, the geographical distribution of the consumption of HTV silicone rubber will be changed obvious in the future.
Meanwhile, the consumption structure of HTV silicone rubber in electronic devices is also changing. HTV silicone rubber products for decorative, anti-dust and protective purposes are increasing rapidly, while the consumption of rubber buttons is expected to decrease significantly. In general, the consumption growth of HTV silicone rubber in this field will fall back to about 4-5% each year.
(3) Insulators. Insulators made from HTV silicone rubber are third-generation insulators to replace the traditional porcelain insulators, and they have obvious advantages over ceramic and glass insulators when used in high-voltage power transmission equipment. The mass production of HTV silicone rubber insulators in China started in mid-1990s, and they were popularized gradually in the past 15 years due to their excellent properties and gradually reduced price. Since 2012, over 60% of insulators used in newly-constructed parts of the grid are made from HTV silicone rubber, and about 40% of insulators currently in use are made from HTV silicone rubber. In some equipment such as surge protectors and insulating cases for mutual inductors, the proportion of silicone rubber insulators is even higher. Meanwhile, the application of silicone rubber insulators in transformers, capacitors, switches and electrified railways is undergoing a rapid development.
In 2013, China’s electricity consumption totaled 5.3223 trillion kWh, an increase of 7.5% from the previous year. In the 12th Five-Year-Plan Period (2011-2015), the demand for electricity in China will maintain fast growth. It is estimated that the total electricity consumption in 2015 will reach 6.27 trillion kWh, up 8.5% year-on-year. Due to the fact that China’s major electricity producing regions are far away from its major electricity consuming regions, the construction of long-distance ultra-high voltage grid still has far to go, leaving enormous development potential for the makers of HTV silicone rubber insulators.
In 2013, the consumption of HTV silicone rubber in the production of insulators in China was about 38 kt, accounting for 12% of the total consumption in China. In the next few years, the consumption of silicone rubber in this field is expected to grow at an average rate of about 11-12%.
(4) Kitchen supplies. With prices continuing to fall, HTV silicone rubber has gradually replaced traditional rubber in many fields. In kitchen supplies, products made from HTV silicone rubber, including various tools for baking, cooking, mixing and conditioning, have advantages like heat resistance, softness, antifouling, long life and non-sticking. In the coastal regions of East China and South China, the decreased consumption of HTV silicone rubber in the production of electronic devices has been made up by the increased consumption in the production of kitchen supplies. In particular, the HTV silicone rubber kitchen supplies industry is thriving in several regions including Ningbo of Zhejiang. In 2013, the consumption of HTV silicone rubber in the production of kitchen supplies in China was about 42 kt, and the figure will continue to increase in the next few years with an average growth rate of 11-12%.
(5) Healthcare and medical field. After decades of clinical applications, HTV silicon rubber has been gradually accepted by the medical community, and over 100 varieties of products made from it are used in the healthcare and medical field. Major products include brain surgery products, ENT products, anesthesia products, digestive system products, cardiac surgery products, thoracic surgical products, urinary and reproductive system products. In other medical fields, HTV silicone rubber products also have a wide range of applications in skin dilators, artificial breasts, scar-removing patches, medical gel pads, foot pads, breast pump covers, baby pacifiers, analgesic pump capsules, artificial joints, fetal suctioning tools, abortion sacs, postpartum bleeding sacs, pipes for uterine water imaging, ovarian cyst treatment pipes, tubal recanalization pipes, uterine thermal balloon therapeutic equipment, contraceptives, intrauterine devices and Norplant devices.
In the future, with continual improvement of the standard of living, the demand for healthcare will be boosted, and the medical equipment industry will surely become a highlight in economic growth.
In addition to medical equipment, HTV silicone rubber is also widely used in the production of nipples of nursing bottles, stoppers of thermos containers and hoses for vending machines. In these fields, it is almost irreplaceable, giving a bright prospect for the HTV silicone rubber market. In 2013, the consumption of HTV silicone rubber in these fields was 15 kt, and the figure is expected to increase about 11% each year for the next few years.
(6) Other fields. Due to the falling price and advantages in performance, HTV silicone rubber has gradually replaced other synthetic rubber materials in swimming and diving equipment. In 2013, China produced over 70 million of swimming caps, of which one third were made from HTV silicone rubber, consuming 5 kt of HTV silicone rubber.
In automotive electronics, HTV silicone rubber can be used to produce protection for ignitions, batteries, sensors, spark plugs, wires, switches, buttons, ABS control systems and ignition control systems. In 2013, the consumption of HTV silicone rubber in China’s automotive electronics field was 21 kt.
In addition, HTV silicone rubber is used in control cables of nuclear power plants and ships, internal wires of electronic equipment, as well as outgoing wires of motors and TV sets. In these areas, HTV silicone rubber has a good development prospect and the consumption in 2013 in China was 20 kt.
HTV silicone rubber can also be used in home applications and rubber rolls. In 2013, the domestic consumption in these fields was about 39 kt, and the consumption structure is shown in Figure 1.

The development of the sector is restricted

Both the production and the consumption of HTV silicone rubber in China have reached a certain level. However, for most domestic silicone monomer producers, more efforts have been put on expanding capacity and upgrading production processes instead of the integration of developing downstream products like silicone rubber. Meanwhile, most HTV silicone rubber producers in China need to buy silicone monomer raw material, significantly restricting their profitability and development. Therefore, to promote the development of China’s silicone industry, it is vital to strengthen the cooperation between upstream sectors and downstream sectors, and major large silicone players should improve their competitiveness through extending their industrial chains.