Market of Chinese silica fume faces great challenges

The elimination of backward production and improvement of the industry’s production technology become the inevitable trend for industry's future development.Throughout the current silicon powder industry, problems of low-end and redundant construction are serious. There is a huge pressure on production costs. The higher cost of environmental management and low self-sufficiency rate of high-end products are still the main problems for the industry. These issues become a great challenge in the process of long-term healthy development of the whole industry.

In recent years, the cost of silicon metal and other raw materials showed a straight line rising trend, raw material prices in 2011 is the sharp rise in a series of breakthroughs in the history of high silica fume production enterprises, although the synchronized increase product prices, rising production costs but can not be fully passed on to end-users, industry finishing the level of profitability severely squeezed. Into 2012, although the sulfur in raw material prices dropped to low, the industry overall profitability has improved compared to 2011, however, due to silica fume product prices at a low level, the industry profit is still low. With the future expansion device is put into operation one after another, the industry price competition will become increasingly fierce, which will directly affect the profit level of the industry.

Although China has the world's leading silica fume-producing countries, but there are still large gaps in production technology and foreign enterprises. First of all, the Chinese production of silica fume is still based on low-end products, product performance, such as dispersion, cover and weather, etc., still lags behind other imported products, high-end silica fume market is still the basic import product monopoly. In addition, silica fume enterprise needs to be improved in the product segments, product homogeneity is a very serious problem, which led directly to increased competition in the industry.

The backwardness of the production process led directly to the silica fume product prices much lower than imported products, under the huge pressure on production costs, in addition to effective control of production costs, improve product performance in order to compete for high-end market is also to maintain business efficiency ways. At the same time, the environmental issue has been one of the important issues that affect the development of silica fume industry. The comprehensive utilization of silica fume is an important task of the problem of environmental pollution and corporate survival.

At present, specifically emission standards for silica fume and sulfuric acid industry is at its drafting stage. It is expected that the standard will be more stringent than the current emission standards. The pressure for metal powder supplier will be greater in environmental protection. In view of long-term running, it will have a positive role in cleaner production and sustainable development of the industry. Although the silica fume industry in China is facing multiple pressures and challenges, the overall development of the market is declined comparing to the previous years. But experts predict that the cobalt powder sales will continue to maintain growth from 2012 to 2015. The compound annual growth rate will be 10%.Source:http://www.mhcmp.com