A new round of price increase storm is coming! After the Dongyue fire incident in Shandong, there was abnormal movement in the organic silicon plate yesterday, with Xin'an and Xingxing directly hitting the limit up! Luxi, Sanyou, Nengtou, Xingfa, Hesheng ... they are all rising! At the same time, individual factories opened their quotations at noon yesterday, with a total increase of 1000 yuan and DMC rising to 11800-12000 yuan/ton; 107 glue has risen to 12500 yuan/ton; The price of raw rubber has risen to 13000 yuan/ton, and the entire market is experiencing a surging trend of price increases.
Specifically, this incident currently has a greater impact on 107 glue. As Dongx is the main manufacturer of 107 glue, multiple silicone glue factories will face delayed shipments in the early stages of stocking. To avoid affecting production, silicone glue manufacturers can only turn to other 107 glue companies to place orders. According to our understanding, the trading volume of 107 glue is still relatively optimistic after the price increase, DMC、 Raw rubber is the main demand. In addition, according to industry insiders, the third phase accident equipment was damaged and it is difficult to resume production in the short term. It is also uncertain when the first and second phase equipment will resume production. At present, the middle and lower reaches are generally optimistic about the short-term price increase effect, but there are doubts about the sustainability of the market. The duration of production stoppage in this accident will be the key factor affecting the sustainability of the market.
Looking at this week, due to force majeure factors, the supply will tighten in the short term, and the rise in organic silicon prices has been confirmed. However, the operating rates of other individual factories also need to be closely monitored. Currently, each factory still has pre-sale orders to be issued in the early stage. After yesterday's increase, some manufacturers still limited their orders, and it is expected that this will further boost the confidence of midstream and downstream stocking.
Cost side: On the raw material side, after the cancellation of electricity price subsidies in Xinjiang, large factories have not yet started resuming production, while the southwest region continues to resume production during the flood season, but the increase in production in the southwest is less than the decrease in production in the northwest, resulting in significant uncertainty in production capacity expectations. As of July 21st, the closing price of the main futures contract Si2509 was 9260 yuan/ton, with a magnitude of+4.99%, a significant increase of 440 yuan per day, and breaking through the 9000 mark! Spot prices have risen, with chemical grade 421 # silicon metal quoted at 9500-10400 yuan/ton; Local increase of 100-200. Overall, driven by policies, industrial silicon has performed relatively strongly, but the structural imbalance between supply and demand has not fundamentally eased, and the focus of transactions is still mainly on rigid demand.
In terms of operating rate: Currently, the production capacity in Shandong region has significantly tightened, and the operating rate may decline to below 70%. With the push of "buying up" this week, if the orders received by individual factories continue to improve, some load reduction devices may be adjusted in the future. In the short term, there is not much pressure on individual factories to ship, and we will closely monitor the changes in individual production capacity in Shandong in the near future.