Recently, the silicone market has experienced a strong rebound, DMC、 The prices of mainstream products such as silicone oil have risen one after another, and the industry generally believes that this is just the beginning. The price increase is expected to form a resonance in the industrial chain.
On July 14th, Shandong Fengdao Enterprise's DMC quotation was 10700 yuan/ton, an increase of 400 yuan/ton compared to before. Other individual enterprises also followed suit with an increase of 200-300 yuan/ton, and the overall market quotation center shifted to above 11000 yuan/ton. Behind this wave of price hikes, there are multiple favorable factors supporting it. Firstly, the cost side industrial silicon market, stimulated by favorable macro policies, has seen a synchronous increase in both expected and current prices, providing a solid cost foundation for DMC prices. Secondly, the digestion of low-priced orders in the early stage was good, and the inventory pressure of individual enterprises was within a reasonable range, optimizing the inventory structure. In addition, after the market continued to be sluggish, the industry's expectation for price increases was concentrated and released, forming a driving force for price increases.
From the perspective of various links in the industrial chain, crosslinking agents and silicone platinum catalysts have become the leading products, and platinum prices have reached a new high since 2010, with a cumulative increase of over 35% during the year. This reflects that the organic silicon market, after experiencing a period of "involution", is gradually emerging from the trough and welcoming new development opportunities.
However, the market also faces some challenges. At present, the silicone market is still in a low season of demand, and with the end of environmental inspections and improvement in profit margins, small and medium-sized individual factories may resume production in the later stage, and the overall operating rate has risen to around 70.5%. Meanwhile, price increases may suppress downstream demand and speculative demand, putting pressure on the market to continue rising.
Looking ahead to the future, the industry believes that it should be viewed in two stages. From July to late August, the expectation of increased macroeconomic policies still exists, and the expectation of upgraded safety supervision in major production areas will also support the market. During this stage, the price of organic silicon may continue to rebound. But after late August, with the gradual implementation of macro policies, the market will enter the verification stage of peak season demand, and the probability of demand falling short of expectations is relatively high. At that time, prices may experience a second dip.
In terms of the product market, the DMC market started to increase prices last week, with decent spot trading and continuously rising costs. Individual factories have a collective bullish mentality. The 107 rubber market has limited follow-up growth, but multiple facilities have stopped for maintenance, and the total inventory of spot goods continues to increase, weakening the bearish sentiment in the market. The supply of silicone oil in the market has limited changes, and the support of raw materials continues to strengthen. However, due to the impact of the off-season demand, the focus of negotiations is on stable volume growth. The supply of raw rubber in the market has tightened, coupled with some factories selling out low-priced orders, it is expected that prices will mainly increase in the short term.
Overall, the silicone market is expected to remain strong in the short term, but the market pattern of long-term oversupply has not fundamentally changed, and price fluctuations may intensify. It is recommended to pay attention to the downstream demand carrying capacity and the actual production capacity reduction pace of leading enterprises, as these two factors will become key variables affecting the sustainability of the subsequent market.