Overcapacity market weakened by foreign pressure Since the beginning of this year, the organic silicone enterprises across the country have experienced an unprecedented cold spell, internal and external difficulties in production and operations, and the living environment has deteriorated. The analysis of the industry pointed out that the main reason is that the industry’s capacity is oversupply and demand is weak, and that international competitors adopt low-cost strategies to suppress Chinese counterparts. This was learned by reporters during the weekend when they participated in the analysis of the economic situation of Zhejiang's oil and chemical industry. The industry reflects that the current price of organic silicon monomers in China has been at a historically low level. Most of the production enterprises have fallen into losses, and the number of enterprises that have stopped production and reduced production has greatly increased. Zhejiang Xin'an Chemical Industry Group Co., Ltd. is the country with the highest organic silicon production scale and technology level. According to the company’s responsible person at the meeting, the apparent consumption of silicone in the country this year is equivalent to approximately 550,000 tons of silicones. Last year, the growth rate was less than 10%. This is the lowest growth rate in the past five years. On the other hand, there are 16 organic silicon monomer companies in China, with an annual monomer production capacity of approximately 1.9 million tons, equivalent to more than 850,000 tons of silicones. It can be seen that the domestic silicone market production capacity is much greater than the demand, and it is expected that this situation is difficult to change in the short term. From the international point of view, the current global production capacity of organic silicon monomer is about 1.95 million tons, and the market demand is about 1.4 million tons, which is also a supply exceeding demand. In particular, after entering October, affected by the European debt crisis and the country’s economic policy to curb inflation, the weak demand for silicones has further aggravated, leading to a decline in the prices of silicone monomers. At present, domestic silicone monomer manufacturers are basically unprofitable. The point where it can be done. In addition, due to the slowdown in downstream demand, especially since the 400,000-ton/year organic silicon monomer project jointly invested by international silicone giants Dow Corning and WACKER in Zhangjiagang last year, it has been put into production. The localization of low-cost production and other advantages, the implementation of low-cost sales strategy in the domestic market, has caused a great impact on the market, the pressure of further consolidation of the industry, the industry tends to become more intense competition. Compared with most domestic counterparts, Xinan Chemical Co., Ltd. has a comparative advantage in terms of production cost and scale, but in the face of such a sluggish market, it has forced the company to accelerate the adjustment of product structure, and through the implementation of technological innovation, the organic silicon industry chain has become more High value-added downstream products such as high-temperature plastic, room temperature plastic, silicone oil and other industries extend. Companies in the industry generally believe that Dow Corning clearly controls the right to speak in the domestic silicone market. If the company continues to hold down its price competition strategy, it will be difficult for the price of the main silicone products to get out of the weak and the industry will face a new round of reshuffling. Therefore, the participating companies proposed that the organic silicon manufacturers in the country must unite and actively discuss countermeasures. At the same time, they appealed to the industry management departments to attach great importance to and take effective measures to help the industry tide over the difficulties. Otherwise, the outlook for the organic silicon industry in China will be bleak.
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