Last week, social finance data was released, showing an increase of 1 trillion yuan in new loans in February, a decrease of 440 billion yuan compared to the same period last year. Among them, medium and long-term loans significantly decreased, residents' medium and long-term loans decreased by 10 billion yuan compared to January last year, and enterprises' medium and long-term loans decreased by 750 billion yuan. Yesterday, the Central Office and the State Council issued the "Special Action Plan to Boost Consumption". The action plan deploys 30 key tasks in 8 aspects, including policies to promote income increase for urban and rural residents, support for consumer capacity guarantee, etc., to comprehensively boost domestic consumption. The document mentions the launch of the "Artificial Intelligence+" campaign to promote "Artificial Intelligence+Consumption", accelerate the development and application promotion of new technologies and products such as autonomous driving, intelligent wearables, ultra high definition videos, brain computer interfaces, robots, and additive manufacturing, and open up a new high growth consumption arena. This means that "artificial intelligence+consumption" industries such as smart wearables and robots have also been officially included in the scope of promoting consumption policies, and these industries are the explosive points of innovative applications of organic silicon. China's organic silicon industry is still in a rapid development stage, benefiting from industry technology, product innovation, and continuous increase in downstream demand. The production scale of organic silicon products in China has always maintained a positive growth trend, and the market size continues to expand.
Ten consecutive increases! DMC/silicone oil has risen again! Based on the current cost pressure in the industry and the production and sales situation of individual enterprises, the latest factory price adjustments last week showed a trend of differentiation, with most factories maintaining stable prices. The organic silicon market showed a long short game, and top individual enterprises continued to adopt a high price strategy. The mainstream DMC quotation remained in the range of 14000-14300 yuan/ton, and local DMC/silicone oil brand quotations rose by 100-200 yuan/ton, achieving ten consecutive increases in transaction average price. Overall, supported by raw material costs and pre-sale orders from enterprises, the bottom prices of the market have shown strong resilience, but the demand side has shown obvious differentiation characteristics: 1) Cost transmission effect is evident: the silicone adhesive industry has issued 3-10% price increase letters, stimulating some midstream enterprises to start replenishing inventory under the expectation of order recovery. The raw material turnover of large and medium-sized sealant enterprises in East China has increased by 15-20 days compared to the previous period. 2) Inventory structure constrains procurement momentum: After experiencing a concentrated replenishment cycle of price rebound in the early stage, downstream processing plant raw material inventory is generally at a high level of 45-60 days. Coupled with weaker than expected demand recovery in terminal construction, electronics and other fields, about 60% of small and medium-sized demand side enterprises maintain their rigid demand procurement strategy. 3) The supply-demand balance adjustment mechanism has been activated: It is worth noting that the operating rate of major individual units has dropped to a low of 67% for the year, and the weekly production of the industry has decreased by 8% compared to the previous period. Enterprises have used volume control and price protection strategies to hedge against weak demand. The pre-sale orders from the top factories have been scheduled for 2-3 weeks, and the short-term inventory pressure is controllable. It is expected that DMC prices will continue to follow a sideways consolidation pattern, with a core fluctuation range of 14000-14300 yuan/ton.
A new round of production reduction and price increase for silicone adhesive has landed! Last week, the 31st annual New Products Expo for Doors, Windows, and Curtain Walls was successfully held. Several top silicone exhibitors have stated that the effect of the second round of production cuts by silicone rubber factories on the monomer side will begin to show in the second quarter, and the supply of silicone rubber will begin to shrink significantly in the second quarter. In the second half of 2024, due to sluggish demand, the price of silicone adhesive fell again, with a 15% decrease in construction and a 10-20% decrease in photovoltaic grade. As a result, mainstream silicone adhesive factories began a new round of production cuts at the end of 2024. The expected explosion of overseas terminal demand this year further enhances the imagination space of silicone adhesive. According to the data disclosed by the participating companies, a new round of silicone adhesive cycle is just around the corner. The demand for building silicone adhesive is expected to rebound comprehensively in the second quarter, with photovoltaic grade slightly later. At the exhibition, a major manufacturer recently stated that some sensitive channel partners are preparing to start stockpiling. The core driving force behind the price increase of silicone adhesive this time is the mismatch between supply and demand, combined with cost pressure
Monomer device dynamics: According to the latest industry trends, domestic organic silicon monomer production enterprises continue to implement capacity regulation measures, and the capacity load rate in the three major production areas of East China, Northwest China, and Southwest China has generally dropped to around 65%.