More than half a week has passed, and the current trend of rising prices in the organic silicon market has not diminished. Currently, there is a differentiation between the cost and demand sides. On the one hand, industrial silicon continues to rise sharply: since June, industrial silicon futures have stopped falling and stabilized, entering an upward phase. In the past month, futures have risen by nearly 2000, driving spot prices to follow suit. As of July 15th, the price of 421 # chemical grade metal silicon is between 9400-10400 yuan/ton, and low-priced resources have significantly narrowed, providing some support for individual factories to raise prices. On the other hand, the middle and lower reaches still hold a pessimistic attitude towards overcapacity, with a production rate of around 70% in July. In fact, the middle and lower reaches are also eager for an increase, but actual actions still need to be sustained and driven by orders. The current upward trend has just begun, and everyone is still in a wait-and-see state. Therefore, it can be seen that downstream chasing the rise still requires a certain degree of confidence reconstruction.
Yesterday, several individual factories' DMC prices rose by 300-500 yuan/ton, while individual factories in Shandong remained stable at the opening. Currently, the DMC price range is 10700-11500 yuan/ton. Due to the different operating conditions of each manufacturer and the different preferential products offered to their own customer groups in the early stage, most individual factories' pre-sale orders can be scheduled until August. However, some individual factories still face significant shipping pressure. The inventory in the middle and lower reaches is also relatively sufficient, and there is no positive feedback from the receiving party, lacking further confidence in following up with the rise.
Overall, after the rebound of organic silicon, market transactions are still in a game state, and it is expected to maintain a slight upward trend of consolidation in the short term.
Raw rubber market: This week, the price of raw rubber has increased with the rise of raw material DMC, with the mainstream quotation being 12300-12800 yuan/ton, and a collective increase of 300 yuan. At present, with cost support, the transaction center of the raw rubber market has rebounded, but demand has not yet recovered. The pattern of oversupply has led to bearish expectations for raw rubber prices among rubber mixing enterprises. In addition, the leading rubber factory still maintains a significant advantage in competition. Last week, the rubber mixing enterprises basically completed the A-class orders of the leading factory first, and were more resistant to other high priced rubber prices. However, the backlog of orders from the leading factory in the early stage has not been shipped yet, and now the order scheduling is until mid to late August. Therefore, there has been an increase in inquiries from rubber mixing enterprises to other rubber factories recently, and there has been a certain increase in demand volume.
Overall, due to the unchanged trend of weak demand on the demand side, downstream rubber mixing enterprises have maintained a demand for replenishment at low prices, and the positive support of the raw rubber market is still insufficient. In this situation, raw rubber enterprises may adopt a cautious attitude towards subsequent price increases, and currently focus on digesting previous orders. It is expected that the raw rubber market will maintain stable operation in the short term.
The rubber mixing market: The price of raw rubber has increased, and this week, rubber mixing companies have also raised their prices to 11800-12500 yuan/ton. In terms of procurement, most rubber mixing enterprises have already completed the basic three vehicle stocking volume last week, and currently have insufficient willingness to replenish inventory. On the demand side, the continuous upward trend of upstream prices in the past two weeks has given a certain boost to the downstream silicon products market. The increase in sales in the small household appliance sector has also eased the supply and demand situation of some enterprises, improved market transactions, and increased stocking of rubber compounds. However, the sluggish overall environment has put most enterprises in a dilemma of increasing income without increasing profits. In order to reduce the risk of losses, silicon product enterprises still adopt a strategy of purchasing rubber compounds at a lower price.
Overall, although the market fundamentals of rubber mixing enterprises have eased, losses and payment risks still exist, so the ability to absorb market gains is limited. Most enterprises attach more importance to cash receipts in order to maintain stable capital chains, and competition is relatively fierce. It is expected that the mixed rubber market will maintain weak and stable operation in the short term.