[concern] Zhongtian fluorosilicon accident or internal shutdown inspection supports silicone DMC to continue to rise.

SMM11 March 10: yesterday, Zhongtian Oriental Fluorosilicon material Co., Ltd. (hereinafter referred to as "Zhongtian Fluorosilicon") exploded at its factory in Quzhou City. According to preliminary verification, the fire covered an area of more than 9000 square meters. Chen Jinbiao, member of the standing Committee of the Quzhou Municipal CPC Committee and executive vice mayor, said that according to the current preliminary research and analysis of Zhongtian HD camera surveillance video transferred by the city's emergency fire rescue detachment, the fire was ignited by Zhongtian No. 3 high boiling material, which in turn triggered a flowing fire and led to the spread of the fire. The exact cause of the fire has yet to be further verified and confirmed by professional departments.

Zhongtian fluorosilicon is one of the main organosilicon manufacturers in China, with an annual production capacity of about 120000 tons. Silicone upstream is chloromethane and metal silicon, downstream is silicone oil and silicone rubber, silicone rubber downstream includes 107 rubber, 110 raw rubber, terminal applications cover electronic and electrical appliances, automotive, construction, medical and other fields. Since the second half of this year, the supply of organosilicon exceeds the demand, and the price continues to rise. SMM latest data show that today (10) DMC quoted 23000-23300 yuan / ton, up 2.21%.

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Xu Yongxian, secretary-general of the Guangdong silicone material Industry Association, analyzed that safety supervision departments will ask for rectification of such accidents, which will take 2-3 months or more according to the available information, according to the Financial Associated Press. Other companies in the industry are also likely to face shutdown inspections, resulting in a shortage of supplies that could support silicone to continue to rise. On the evening of the 9th, a person in charge of the Zhejiang silicone material Industry Association said in an interview with the Financial Associated Press that after the explosion, other companies in the industry may face production suspension safety checks, resulting in a shortage of supply, which can support DMC prices to continue to rise in the medium to long term.

SMM believes that the inventory of silicone manufacturers in the current market is low and demand exceeds supply. And on the demand side, while domestic demand is good, the export of terminal products is also good. The explosion mainly affected market sentiment, and many monomer factories failed to close the market, stimulating silicone prices to continue to strengthen in the short term.