The organic silicon market is experiencing a critical change, with a stable and fluctuating trend last week, and DMC prices slightly declining. The benchmark enterprise DMC quotation in Shandong has fallen to 11800 yuan/ton, a decrease of 500 yuan from last week. However, the market acceptance is limited, and the transaction atmosphere continues to be sluggish. Although some companies have lowered prices to reduce inventory, the promotional effect is not good. The core change in the market game lies in: on the supply side, exploratory concessions in the early stage have not been responded to, and the strategy has been adjusted to real order bargaining and promotion. On the demand side, the downstream "three no's" strategy (not following the decline, not hoarding, and not accepting orders) is prevalent, and the willingness to purchase is low. Transaction end: Overall trading volume is light, with actual transactions concentrated in small orders for immediate needs, while large orders require deep bargaining.
Recent market trends indicate that the silicone market is gradually stabilizing after experiencing fluctuations in the first three years. Several industry veterans have analyzed that the market is likely to enter a phase of bottom consolidation. The core basis for this judgment is that the fluctuation range of core large order transaction prices, which represent the mainstream market trend, has significantly narrowed and is currently mainly stable within the range of 11800-12300 yuan/ton. The narrowing of this price range reflects that the current game between supply and demand has entered a relatively balanced state, and market sentiment tends to be cautious and wait-and-see.
In this market landscape, two key dimensions have undergone changes: 1 The production capacity adjustment trend of enterprises with cost inversion: At the current price level, some enterprises with high production costs are already below the breakeven line or facing cost inversion pressure. The subsequent production capacity operation strategies of such enterprises, such as actively reducing loads, suspending production for maintenance, and even long-term withdrawal, will have a significant impact on the overall market supply pattern, and are important observation points for determining when the market can emerge from the bottom and achieve supply-demand rebalancing. 2. Marginal changes in organic silicon export orders: Overseas market demand is an important variable affecting the prosperity of the domestic organic silicon industry. It is necessary to closely track the changes in export order volume, prices, and demand trends in major destination markets. Any positive marginal improvement, such as a rebound in order volume or an increase in the proportion of high-end product exports, may become a catalyst for market expectations to shift.
However, while paying attention to short-term market trends, it is even more important to address the deep-seated structural challenges that plague the organic silicon monomer industry (the core link of the organic silicon industry chain): a severe lack of innovation drive and a deep quagmire of homogenization: for a long time, the development strategies of monomer enterprises have overly relied on low-cost competition models. Although this model has its rationality in specific stages of development, its negative effects are becoming increasingly prominent - companies generally lack the motivation to invest in forward-looking research and development of new technologies and products. The insufficient investment in research and development directly leads to high homogenization of products, making it difficult to establish differentiated competitive advantages, and making it difficult for enterprises to build true core competitiveness. In the end, the entire industry fell into fierce internal competition in low value-added areas, weakening profitability and risk resistance.
Embracing emerging technologies is weak, and the road to transformation is arduous: a new round of technological revolution represented by artificial intelligence (AI) is profoundly reshaping various industries, and the demand for high-performance and intelligent materials in downstream applications of organic silicon (such as new energy vehicles, electronics, healthcare, construction, etc.) is constantly upgrading. However, many individual enterprises lack a deep understanding of emerging application technologies such as AI, and lack a clear understanding and feasible path on how to empower their own product development (such as material design, performance prediction), optimize production processes (such as intelligent manufacturing, process control), improve operational efficiency, and even explore new application scenarios. The gap between technological awareness and application capabilities makes it extremely difficult for individual enterprises to seize the new opportunities brought by technological changes in the process of transitioning towards high value-added and technology driven models.
Summary and outlook: The current organic silicon market is in a phase of bottom consolidation, with the price range narrowing to 11800-12300 yuan/ton. In the short term, it is necessary to focus on the production capacity adjustment of cost inverted enterprises and the marginal changes in export orders. However, the long-term healthy development of the industry relies more on breaking through the shackles of insufficient innovation and difficult transformation. Individual enterprises urgently need to break away from their dependence on a single low-cost strategy, increase research and development investment, promote product differentiation and technological upgrading, and actively explore the integration of emerging technologies such as AI into research and development, production, and application development in order to win the initiative in future market competition and achieve value reconstruction from "quantity" to "quality". The consolidation period at the bottom of the market may also be a critical window for companies to deeply reflect and layout for the future. Industry insiders believe that the key to driving the entire industry to cut losses and make profits lies in the strict implementation of self regulatory production restrictions by top individual enterprises, thereby achieving the goal of destocking. After obtaining effective price support, the organic silicon industry can enter a stable and orderly development stage.