Increase by another 500! Entering Wednesday, the silicone market is still immersed in a rising trend and unable to extricate itself. After a surge of 1000 yuan in DMC, prices rose again yesterday, with Shandong's benchmark rising to 11900 yuan/ton, and other individual factories rising another 500 yuan. DMC quotes range from 12000 to 12500 yuan/ton; Industrial silicon has recently entered a "retaliatory" rise, with futures hitting the daily limit up yesterday! On July 22nd, as of the close, the main contract for industrial silicon, 2509, closed up 545 to 9655, an increase of 5.98%. Industrial silicon seems to have a high rhythm of breaking through "9000" first and then reaching "10000" in the past two days.
After continuous price increases, the market transaction prices have generally risen, and the trading atmosphere has improved. The sudden reduction in supply not only gives confidence to the upstream rebound, but also disrupts the downstream stocking pace. Some manufacturers who plan to buy at a low price by the end of the month for light warehouse operations, as well as those who have already stocked up for East X, have no buffer space after the sudden event, and prices have skyrocketed by 1000+. They can only accept high prices and actively stock up to avoid affecting production.
Overall, after this accident, the bullish atmosphere in the middle and lower reaches has increased, with early stocking at the end of the month and relatively smooth orders from individual factories. At the same time, the significant increase in costs has added to the determination of individual factories to rise. In addition, there is a piece of news worth paying close attention to. In order to fully learn from the lessons of the accident, on July 21st, the Wuda District Market Supervision Administration conducted a comprehensive special inspection of two organic silicon units. After inspection, some special equipment on site of Inner Mongolia Hengye Cheng Organic Silicon Co., Ltd. has safety hazards such as equipment body, connecting pipe, and flange corrosion, and has been requested to rectify within a specified time limit as soon as possible. As far as we know, normal production is currently being maintained; The organic silicon project of Inner Mongolia Xingfa Technology Co., Ltd. has been completely suspended due to overall planning issues, and the resumption time is uncertain. As it is still under construction, it has no impact on the current production capacity. But it is worth noting that there will be major events in September, and some individual enterprises in the north may be subject to certain control measures for rubber production. Therefore, supported by multiple factors, it is expected that the silicone market will maintain a high volatility pattern in the short term.