According to Global Silicone Network on September 27:State Grid Hunan Electric Power Co., Ltd. issued an urgent notice on the orange alert for power grid safety in Hunan Province on September 22. On September 23, parts of the three northeastern provinces implemented power outages during peak hours, with power rationing extended from industrial to residential users. Qinghai, Ningxia, Guangxi, Guangdong, Fujian, Xinjiang, Yunnan, Shaanxi, Jiangsu and other regions were recently criticized again as their energy consumption intensity rose instead of falling, meaning power and production restrictions will continue. Judging from the latest developments, the nationwide power shortage is not easing but worsening. Starting October 1, Guangdong Province will implement a new time-of-use electricity pricing policy, with peak electricity prices to rise a further 25% on top of the existing peak rates.

The silicon market has seen volatile and unpredictable movements recently.Silicon metal prices hit new highs driven by production halts at silicon plants in Dehong, Yunnan. Grade 421# silicon metal for silicone use in East China stood at around 65,000 yuan per ton, while high-end silicon metal producers in Xinjiang pushed prices above 70,000 yuan.

Under pressure from high and scarce silicon metal supplies, monomer plants imposed supply limits and reinstated quotations for various silicone products with striking price increases.Major silicone raw materials including DMC, 107 silicone rubber, crude rubber and silicone oil were priced in the range of 63,300–73,000 yuan per ton.

Three major international brands — Dow, Wacker and Shin-Etsu — announced price adjustments starting October 1, with increases ranging from 10% to 30%.Affected by rising raw material costs, downstream manufacturers issued notices one after another, switching to order-by-order negotiation and limited supply. Some producers raised product prices by 50% to 120%.

Industry insiders noted that prices for silicon metal, DMC and crude rubber have not yet peaked, though the outlook for downstream products is uncertain.Without demand from Pop It Fidget Toys, the crude rubber market would have been very weak this year.Unrestrained purchasing for Pop Its fueled the surge in compound silicone rubber prices.This week, mainstream quotations for compound rubber stood at 50–53, with trading volume slowing noticeably.Further large gains in the downstream market are considered unlikely.

With raw material costs for crude rubber staying elevated and expected to remain high for some time, downstream producers are forced to upgrade and transform — either raising prices for core branded products or exiting the market.

Guibao Technology: Order-by-Order Negotiation

On September 23, Guibao Technology issued a notice stating that, due to persistently high prices and severe shortages of silicone raw materials, the company could not maintain normal production and all products were out of stock.To ensure continued quality supply and services to customers, the company decided as follows based on market conditions:

1. Starting September 23, 2021, customers must confirm stock availability before placing orders.
2. All products will be priced order by order, with shipment only after payment is received.
3. Orders placed through the system will take effect only after company confirmation.

The above is hereby notified. For details, consult your regional manager.

Xingfa Group Ranked among China’s Top 500 Enterprises for Seven Consecutive Years

On September 25, the 2021 China Top 500 Enterprises Summit was held in Changchun, Jilin.The China Enterprise Confederation and China Enterprise Directors Association released the “China Top 500 Enterprises” list.Yichang Xingfa Group Co., Ltd. ranked 478th among China’s top 500 enterprises in 2021, making the list for seven consecutive years since 2015.In the simultaneously released 2021 China Top 500 Manufacturers, Xingfa Group ranked 233rd.

Recently, during a research visit to Xingfa Group, the company shared views on the current market trends of silicone and industrial silicon, as well as its development strategies.

The company will definitely expand into the downstream silicone sector:Xingfa will extend its silicone business downstream. It has already deployed 107 gum and 110 gum in downstream sectors.In the future, the company will introduce more than 10 enterprises into its industrial park through investment promotion to form an industrial cluster.It is also cooperating with the Chinese Academy of Sciences in photovoltaic adhesives and aerogels, with smooth R&D progress.The company plans to enter high-value-added downstream silicone sectors and may also do so through mergers and acquisitions.

High silicone prices will persist:The commissioning schedule of capacity expansion projects will fall short of expectations, with some expansions delayed from the second half of this year to the first quarter of next year.The strong silicone market will last longer.China’s silicone exports have grown rapidly in recent years, due to strong overseas demand and low operating rates among foreign producers amid the pandemic.