What Impact Will The Silicone Industry Face In The Current Epidemic?

At the beginning of 2020, the global fight against the new crown virus was launched. The impact caused China to extend the resumption of work and school. Various industries fell into crisis. The silicone rubber industry suffered the same turbulence. From the upstream point of view, there are 23 upstream silicone companies in the country, located in Hubei Two of the hardest-hit areas in the province have gradually resumed work, and other regions are gradually resuming work and production. During the epidemic, the return of employees and logistics factors may lead to an increase in raw materials.

From the perspective of national production capacity, my country's organic silicon material production capacity reached 1.423 million tons a year in 2019, accounting for more than half of the world's total output. With the impact of this year's epidemic, it is difficult to predict that the annual output will not exceed 2019.

Generally speaking, the epidemic situation was basically effectively controlled in the first quarter, and the impact on downstream silicone rubber companies and consumption can be controlled. However, the impact on exports will continue to decline. In the short term, domestic consumption will stagnate. In the third quarter, upstream silicon materials and downstream silicone products will usher in a growth period. In this short period, the downstream silicone manufacturers of small and medium-sized enterprises will face various challenges, and the industry concentration is expected to further increase.

For downstream silicone products, there is no major impact on the traditional consumption field. Because organic silicone products have a wide range of applications, they have certain advantages in electronics, construction and energy industries. Due to traditional consumption and online consumption, this time Due to the impact of the epidemic, silicone daily life and silicone medical and healthcare products will usher in a major breakthrough. The future development trend will have greater investment and research and development for epidemic prevention and control, and immunity-enhancing products. Therefore, silicone will be used in life in the next few years. Protection, daily health supplements and other industries are getting closer and closer.

On the whole, silicone upstream and downstream companies have been in a period of stagnation in recent months. Recently, due to the delay in resuming work after the Spring Festival, the decline in the rate of return to work in upstream and downstream companies has caused most companies to face shortages. In the past year, upstream silicon Companies may be affected by the logistics of raw materials and finished products. The epidemic will affect electronic companies that are highly dependent on labor and logistics in the short to medium term, and the epidemic will reduce people’s desire to consume and will affect online and offline electronic product retail. The quarterly shipments of electronic products will decline year-on-year, but the demand for consumer electronics in the first quarter is relatively weak. After the epidemic, demand will rebound. Therefore, there will be a rebound effect on electronic peripheral silicone materials.

On the whole, China’s economic growth rate is expected to be less than 5% in 2020, and the contribution rate of China’s economic growth to world economic growth in 2019 is expected to be around 30%. If China’s economy declines in 2020, the global economy will be affected. There is no doubt that China's organic silicon industry will still face greater challenges to foreign trade in 2020.