Recently, China's cosmetics industry has achieved remarkable results, with a total retail sales of 229.1 billion yuan in the first half of the year, reaching a new high in nearly five years. The market size has exceeded one trillion yuan for two consecutive years, becoming the world's largest consumer market for cosmetics. The proportion of domestic brand transactions surpassed that of international brands for the first time last year. This strong demand has also been transmitted to the field of organosilicon. Leading companies have revealed that the order volume of the cosmetics industry in the first half of the year generally increased by 10% -15% year-on-year, and product prices remained stable.
Last week, the domestic organic silicon market remained stable but slightly strong. The quotes from major single factories in Shandong have remained stable at 12300 yuan/ton, while many other companies have closed their stocks, resulting in tight spot circulation in the market. The average transaction price of each product has slightly increased, with DMC at 12450 yuan/ton, 107 rubber at 13550 yuan/ton, raw rubber at 13450 yuan/ton, and silicone oil at 14550 yuan/ton.
There are two major supporting factors in the market. One is the persistent cost pressure, with high prices of silicon metal and inverted production costs for individual enterprises, providing bottom support for prices; The second is the boost in export demand. Under the stimulus of export tax rebate policies, the short-term growth of organic silicon export orders has driven the recovery of raw material procurement demand.
The market presents many characteristics. In terms of pricing, mainstream brand spot prices fluctuate narrowly; Transactions are mainly based on historical order supplements, with limited new orders; Although the downstream silicone rubber and rubber compound markets continue to rise, the terminal order volume has slightly declined, and the market's wait-and-see sentiment has heated up. Enterprises are purchasing according to orders, and the pace of large-scale inventory replenishment has slowed down. There are differences in expectations for the future among middle and downstream enterprises. The current market is in a supply-demand game stage, and it is expected to maintain a volatile consolidation pattern in the short term.
It is worth noting that there is a new trend in industry self-discipline. The collective initiative of top individual enterprises is to build a healthy competition ecosystem, promote capacity governance, oppose vicious competition, and for the first time propose the "three principles of competition ethics", including price self-discipline red line, innovation protection mechanism, and service quality standards. This indicates that the competition standards in the domestic organic silicon market are expected to shift from policy regulation to enterprise autonomy, changing the "incremental competition" model.
From the perspective of device dynamics, most production enterprises are saturated with orders, and some have suspended accepting orders. Some large devices in Inner Mongolia, Xinjiang, and Zhejiang have resumed production, driving the overall operating rate of the industry to rise to around 71.5%, and it is expected to stabilize at over 70% in August.
In terms of segmented markets, the DMC market is mainly closed, with room for price increases; The spot price of 107 glue fluctuates narrowly, and the price is expected to remain stable this week; The trend of silicone oil market varies, with mainstream quotes slightly rising and short-term plans for price adjustment; The raw rubber market is stable, supply remains low, and the purchasing enthusiasm during the peak demand season is still acceptable, with strong support from the bottom of the industry.
Overall, the competition in the organic silicon industry has shifted from "scale" to "cost". With the implementation of production capacity regulation policies and stricter environmental protection measures, the industry concentration is expected to increase, and price fluctuations are expected to become more stable. We need to focus on the price trend of silicon metal and the recovery of terminal demand in the future.