Recently, the organic silicon market has been shrouded in a continuous decline, with prices of DMC and fumed silica (silicon dioxide) continuing to decline. The industry is facing severe challenges, but there are also some positive signals, such as the beginning of the first quarter of Huitian New Materials, which brings a glimmer of hope to the market.
In the DMC market, prices continue to hit new lows. From a cost perspective, the price of silicon metal has fallen, methanol prices have remained stable, and the cost of self-produced chloromethane has also decreased, which directly leads to a reduction in DMC production costs. Under the dual influence of cost reduction and fierce competition among enterprises, multiple individual factories have lowered their offers, and the phenomenon of bidding for shipments has become increasingly common, with transaction prices falling all the way. At present, the mainstream quotation has fallen to 11300-12000 yuan/ton, and a flexible sales strategy of single item negotiation has been implemented. Although the downward space for DMC raw material prices is limited and the willingness of enterprises to continue to offer discounts is gradually weakening, the intense market competition will result in a weak and stable operation of organic silicon product prices in the short term. As a result, the prices of downstream products such as 107 rubber, raw rubber, and silicone oil have also fallen, and local enterprises in the mixed rubber market have also experienced a decline in their quotations.
The market for gas-phase silica is also not optimistic, continuing its downward trend. The supply of raw materials such as methyl trichlorosilane and silicon tetrachloride is sufficient, but market demand is very limited, and prices can only be adjusted weakly. The weak terminal demand is the key factor leading to the sluggish gas silicon market. Downstream markets such as high-temperature adhesives and room temperature adhesives continue to decline, resulting in a significant decrease in demand for gas silicon. Although some gas silicon enterprises have undergone equipment maintenance, the overall market supply remains stable and the source of goods is sufficient. Some enterprises have to sell at low prices in order to seize market share. In the short term, the prices of raw materials such as methyl and tetrachlorine fluctuate at a low level, and downstream demand remains weak, making it difficult to form strong support for the market. It is expected that the silicon gas market will maintain a weak consolidation trend.
However, amidst the downturn, some companies have also shown strong resilience. After experiencing a 66% decline in net profit, Huitian New Materials began to show a positive trend in the first quarter. This undoubtedly injects a shot in the arm into the industry and proves that in the cold winter of the market, enterprises can still find space for survival and development through their own efforts to adjust strategies, optimize product structures, and improve technological levels.
For the entire silicone industry, the current market situation is both a challenge and an opportunity. Enterprises need to closely monitor market trends, control costs reasonably, strengthen technological innovation and product research and development, and enhance the added value and market competitiveness of their products. At the same time, the industry also needs to strengthen self-discipline, avoid vicious competition, and jointly promote the healthy development of the market. I believe that with the joint efforts of the industry, the silicone market will eventually usher in a moment of warmth and prosperity.