The low price war continues! From the quotes of individual factories, the downward trend of DMC is temporarily stable. Shandong DMC quoted 10500 yuan/ton, while other individual factories quoted around 11000 yuan/ton, but the focus of transactions is moving towards low-end quotes. At present, individual factories are constantly stimulating orders through price for volume operations, and downstream enterprises have lost their enthusiasm for stocking up due to repeated bottom fishing failures. In addition, the profit margins of middle and downstream enterprises are also precarious. Price cutting inquiries are sweeping the entire industry chain from bottom to top. This week, raw rubber, 107 rubber, and silicone oil have followed the downward trend of DMC, and the price difference is gradually narrowing. It is expected that the market will still be difficult to get rid of this endless low price competition in the short term. It is worth mentioning that organic silicon is constantly hitting a 10-year or even 20-year historical low! However, platinum catalyst, an important additive in the silicone industry, is facing a significant increase in costs. Its main raw material, platinum, has been in a rising trend since June. According to Wind data, spot platinum once reached $1300 per ounce on June 13th. Since the beginning of the year, the cumulative increase in spot platinum has exceeded 40%, reaching a new high in nearly a decade.
The cost of platinum catalysts has rapidly increased, but the demand in the silicone industry has been sluggish recently, and platinum catalyst manufacturers dare not raise prices rashly. Most of them first digest the increase on their own, and profits are gradually suppressed. In the future, or as costs continue to rise, they have to adjust prices upwards. The above two have formed a highly contrasting price and industry situation. From the current market situation, in order to gain an advantage in the competition of the stock market, it is not enough to win solely by price. The real ultimate is to have absolute core quality and technology. Everyone also needs to actively innovate and upgrade their own products in order to seize the market high ground.
On the cost side: The expectation of large factories in Xinjiang starting furnaces is gradually landing, and with the arrival of the wet season, the number of furnace opening enterprises in the southwest region is increasing, and the production is gradually increasing, resulting in increased supply pressure. On the demand side, polycrystalline silicon is in a pattern of weak fundamentals, with limited orders due to sluggish demand, while organic silicon monomers have recently experienced frequent declines, providing weak support for industrial silicon.
Overall, the supply and demand imbalance in the industrial silicon market is severe, and the high inventory pattern of manufacturers is difficult to change. In addition, the bullish sentiment on the market has cooled down, and prices have stabilized recently. Yesterday, the closing price of the main futures contract Si2509 was 7370 yuan/ton, and the stable price of 421 # metal silicon was between 8500-9900 yuan/ton. It is expected that industrial silicon will maintain weak and stable operation in the short term. In terms of operating rate: Recently, major factories have resumed production, and the operating rate has risen to over 70%. There is a high risk of accumulating inventory. Due to the fact that most individual factories did not deliver as expected in the first half of the year, even after nearly half a year of production cuts, the pressure on individual factories to accept orders has not been effectively alleviated due to the decline in demand in the second quarter. In the future, the probability of relying on collaborative production reduction is not high, and more people are forced to voluntarily reduce production due to the intensification of losses!