After the holiday, the DMC market rose across the board, with silicone links increasing prices and DMC mainstream rising to 14000-14300 yuan/ton. This week, the price transmission of the organic silicon industry chain began to differentiate, and the upstream and downstream game entered a new stage. According to sources, the upstream meeting will be held today, and how to reduce production, raise prices, and maintain profits remains the focus of attention. From the recent market performance, it can be seen that the delivery of contract orders from major individual factories has entered the final stage, and everyone is competing for a new round of orders. Data shows that the silicone rubber industry chain presents obvious structural market characteristics. Stimulated by the continuous production reduction of individual factories, the industry is experiencing a price transmission game between upstream and downstream links, and the market performance of each link shows significant differentiation.
Upstream links have both increased in quantity and price: the raw rubber link has become the core of this round of market trend, and mainstream brand quotations have risen to 15000-15300 yuan/ton, achieving significant recovery from the previous low. The price drive mainly comes from: 1) the support of raw material costs such as DMC; 2) The load of the individual plant equipment is maintained at a low level of 65% -70% during operation; 3) The demand for terminal replenishment is concentrated, especially for products such as seals, molded foam, silicone tubes, swimming equipment, and silicone cables, which have seen a month on month increase in procurement volume of over 30%. The current inventory cycle of raw rubber has been compressed to around 10 days, and most raw rubber companies maintain a low inventory operation strategy, resulting in a temporary supply-demand situation in the market.
The midstream segment is operating under pressure: the mixed rubber market is facing a completely different situation, with mainstream prices stable in the range of 13700-1141 yuan/ton. The main limiting factors come from: 1) Homogenized overcapacity leading to high inventory, with an industry average inventory of over 25 days; 2) The procurement strategy of product enterprises has shifted towards "replenishing inventory on demand", and the willingness to stockpile has significantly weakened; 3) The processing fee space continues to narrow, and some small and medium-sized enterprises have approached the breakeven line. Key variables for future development: 1) Cost transmission mechanism: Raw rubber enterprises have a strong willingness to raise prices, but they need to be alert to the negative feedback effects that may be caused by transmission blockages in the mixing process. 2) Device dynamics: The progress of new rubber production capacity in Yunnan, Inner Mongolia, Hebei and other regions may change the regional supply and demand pattern. 3) Terminal demand sustainability: If the replenishment cycle of the product enterprise ends, the demand side support may gradually weaken. The current market is in a critical game window period, and it is recommended that downstream enterprises focus on individual factory production schedules and changes in terminal orders, and reasonably control the level of raw material inventory. For rubber production enterprises, while maintaining price advantages, they need to guard against the risk of industry chain price transmission breakage caused by excessive price hikes.