The trade war between China and the United States is like a huge rock thrown into a calm lake, causing ripples in the silicone market.
From the perspective of exports, the additional tariffs imposed by the United States mainly target China's deep-processed silicone products, such as silicone sealants and silicone rubber products. This has led to a significant increase in the export costs of related Chinese products, causing them to lose their price advantage. As a result, some American customers have turned to suppliers in Southeast Asia, India and other places, leading to a short-term decline in China's direct export volume to the United States. However, some categories of polysiloxane in primary form have been exempted from tariffs. As a result, the cost of China's exports of this category to the United States has decreased, its price competitiveness has improved, and the export volume is expected to increase.
Within the industry, enterprises actively respond to challenges. Some enterprises are accelerating the layout of production bases in Southeast Asia to skillfully avoid high tariffs. At the same time, increase the research and development efforts on high-end silicone products, such as electronic-grade silicone oil and photovoltaic encapsulation glue, in order to replace imports and meet the demands of the US market. At the industry level, leading enterprises play a leading role, take the lead in integrating production capacity, and prevent the industry from falling into a vicious cycle of low-price competition. It has also jointly launched special loans with financial institutions to alleviate the financial pressure on small and medium-sized enterprises.
Elaborate on the impact of the trade war on the upstream and downstream of the silicone industry chain. At the upstream raw material end, the uncertainty brought by the trade war has caused raw material prices to fluctuate like a runaway horse, increasing the difficulty of cost control for silicone production enterprises. Enterprises have to adjust their procurement strategies, seek alternative raw materials or establish closer long-term cooperative relationships with suppliers. Downstream application fields, such as construction, electronics, and automobiles, have seen fluctuations in demand due to the impact of the trade war. The economic uncertainty in the construction industry caused by the trade war has led to the delay of some projects and a decrease in the demand for silicone sealants, etc. Due to intensified technological competition in the electronics industry, the performance requirements for silicone materials have increased, prompting enterprises to increase their investment in research and development.
Overall, the trade war has forced the silicone industry to accelerate its transformation and upgrading, moving towards high-end, green and intelligent directions to adapt to the complex and ever-changing international market environment.
