The cost of high temperature vulcanized (HTV) silicone rubber, one of the essential ingredients in silicone rubber manufacturing, was reached 23,000 yuan per metric ton in March 23, 2017. Silicone rubber compound was sold at peak 21,000 yuan per metric ton right before Chinese Spring Festival. The latest average range is 19,800 to 21,000 yuan per metric ton. However, as the demand is high and most major manufacturers have full production schedule, they would prefer advanced or early payments.
The down stream silicone rubber factories also increased the price of finished products as a chain reaction of higher costs of upper stream raw materials. The higher prices boosted the export amount and return of sales payments. Many factories are hiring more operational workers to fulfill the orders. The market is positive and upward in general.
The surge of silicone rubber demand in China might caused by the reasons as follows.
First, the increased demand from the down stream factories, especially from the Pearl River Delta Economic Zone, where produces about 65% of total amount of global silicone rubber and in which 80% is for export.
Second, in the past three years, most organoslicone monomer manufacturers didn’t enlarge the production capacity so the supply amount didn’t increased with the market demand.
Third, many organoslicone monomer manufacturers in the past years produced silicone rubber compound, therefore HTV silicone rubber is most for self-supply and the available market supply decreased.