Mitigation of tight supply expected with upcoming partial operation of Runhe’s 35kt/a silicone project by the end of the year

Jiujiang Runhe Synthetic Materials Co., Ltd. (one of the production bases of Ningbo Runhe High-tech Materials Co., Ltd.) started the construction of its 35kt/a new silicone materials project in October last year. With the completion of the main structure of ten newly built factory buildings, the project is expected to be put into partial operation by the end of this year.

The project will cover 15 series of products including silicone oil and silicone resin, with an estimated annual output value of over RMB1.2 billion. Liu Mingyin, head of Jiangxi Runhe’s silicone project, said that the company will also aim at the deep processing of downstream products of silicone, and strive to increase the number of products by 5 to 8 types in five years. By then, the annual output value is expected to exceed RMB2 billion.

In terms of agricultural adjuvants, RH-208 independently developed by Runhe is the flagship product of the company. RH-208 features super wettability, excellent permeability, and wash off resistance, and is conducive to promoting the absorption of pesticides, and helping save pesticides by over 30% and water by over 50%. It is an excellent agricultural silicone synergist.

Heptamethyltrisiloxane is one of the core raw materials to produce RH-208. Currently, the upstream raw materials to produce heptamethyltrisiloxane, namely high hydrogen-containing silicone oil and MM (hexamethyldisiloxane), are high in market price which are RMB45,000/ton and RMB100,000/ton (once soared to RMB130,000/ton), respectively. The current market price of trimethylchlorosilane, an upstream raw material of MM, is RMB60,000 to RMB650,000/ton, and the quotation of some suppliers even reached RMB80,000/ton. The price of DMC, an upstream basic raw material of silicone, is around RMB61,800/ton, and that of silicon metal, an utmost upstream raw material of DMC, is RMB63,000~64,000/ton, which is slightly downward but still high. The price of this series of products has at least doubled year-on-year.

Under the tremendous pressure of soaring production cost, the price of RH-208 has to be increased, which is now kept at around RMB50,000-55,000/ton. Runhe has made every effort to secure the stable supply to its domestic and overseas markets and the firm execution of orders from customers. With the operation of Runhe's Jiujiang base at the end of the year, the tight supply landscape is expected to be mitigated.

The 35kt/a new silicone project of Jiujiang Runhe Synthetic Materials Co., Ltd. is built in two phases:

The first phase will have an annual production capacity of 25,500t silicone products, mainly including: 3,000t block silicone oil, 4,000t terminal epoxy polyether silicone oil, 3,000t terminal hydrogen-containing silicone oil, 2,000t hydrogen-containing silicone oil, 5,000t MM (hexamethyldisiloxane) and MDM , 3,000t heptamethyltrisiloxane, 3,000t vinyl silicone oil, 500t amino modified polyether, 1,000t Hydrogen cyclosilixane, and 1,000t silicone resin.

The second phase will have an annual production capacity of 9,500t silicone products, mainly including 2,000t epoxy terminated allyl polyether, 500t phenyl silicone oil, 3,000t polyether, and 4,000t silane coupling agent.