On Thursday, the silicone market remained at a low level, with the mainstream DMC quotation range being 11400-12700 yuan/ton. The current market presents the following significant features:
Firstly, there have been new changes in the supply-demand game situation. A large factory in the northwest region has started a 20 day maintenance, and a North China enterprise also plans to shut down the entire production line for 15 days on June 3. There are also multiple enterprises with maintenance plans after the June holiday. In this context, the industry's operating rate will show a stepped downward trend. At the same time, terminal enterprises have started to replenish inventory in batches. Although most enterprises still adhere to the principle of essential procurement, the market transaction activity has increased by 15-20% compared to last week.
Secondly, market support factors are gradually emerging. The price of raw material silicon metal has begun to stabilize, and the cost lines of individual factories have diverged. Some enterprises have already reached the break even point. It is expected that the industry's operating rate will drop to around 63% in June, and monthly production will be reduced by about 70000 tons. In addition, there has been a seasonal demand for replenishment in fields such as photovoltaic modules and electronic adhesives, which has provided some support to the market.
Thirdly, in terms of predicting price trends, the current market is in a bottoming out stage. Although some small and medium-sized individual factories still engage in hidden price reduction promotions of 100-200 yuan/ton, mainstream enterprise quotations have stabilized. Considering factors such as a decrease in social inventory turnover days to 12 days (a decrease of 3 days from the previous month), a 35% increase in maintenance scale in June compared to the previous month, and an extension of downstream order visibility to 2-3 weeks, it is expected that the DMC price at the end of the month will show the following trend: the mainstream transaction range is 11500-12500 yuan/ton, and low-priced sources will gradually decrease, narrowing the actual transaction profit margin to 50-100 yuan/ton. We need to focus on the actual release progress of new production capacity in June, the recovery of organic silicon export orders, and changes in downstream enterprise raw material stocking cycles in the future.
Analysis of the 107 rubber market shows that the market has continued its weak and stable trend this week, with limited support from the demand side. As of May 29th, the mainstream transaction price of 107 rubber in the domestic market has remained stable at over 13000 yuan/ton. The performance of terminal demand is still acceptable, but the bargaining space has narrowed. Market transactions are mainly based on essential orders, and the overall trading atmosphere is relatively light. The cost side support performance is weak and stable. Although the price of raw material DMC has stopped falling and stabilized, the market is still dominated by low-priced transactions, which has limited cost support for 107 rubber. There is a clear differentiation in the supply side, with the current operating rate of individual factories remaining at a low level of around 65%. The 800000 ton plant in the northwest region continues to undergo maintenance, and top individual enterprises focus on ensuring stable shipments to core customers. However, due to the weak terminal consumption, new order transactions have been sluggish, and some individual factory holders who lack stable large customers continue to adopt concession operations. The market presents a differentiated pattern of "orders are king". In terms of future prospects, in the short term, it is difficult for the cost side to show a significant boost, while the demand side has limited incremental growth. It is expected that the 107 rubber market will continue to operate weakly and steadily, and the price fluctuation space will further narrow. It is necessary to closely monitor the downstream procurement rhythm and the trend of raw material DMC.