On August 15th, despite a one-day delay in closing, a new round of global negotiations on plastic pollution control still failed to reach a consensus. This round of United Nations negotiations was supposed to be the final round of negotiations aimed at developing the first legally binding international agreement on the control of plastic pollution, including marine plastic pollution. But like the conference held in South Korea last year, the negotiations once again failed to achieve results. Industry analysis shows that silicone materials have achieved large-scale substitution for plastic products in fields such as medical devices and food packaging. However, in order to achieve comprehensive replacement of plastics, silicone still faces three core challenges: firstly, in terms of cost control, the raw material price of silicone is 30% -50% higher than that of ordinary plastics, which restricts its application in price sensitive fields such as daily necessities; Secondly, the limited high temperature resistance makes it difficult for silicone to completely replace engineering plastics in applications such as electronics and electrical appliances; Furthermore, the existing recycling system is not yet perfect, and there is still room for breakthroughs in large-scale recycling and utilization technologies. These factors together constitute the technological and economic barriers for silicone to fully replace plastics.
Last week (August 10th to August 17th), the organic silicon market continued its downward trend, with the mainstream transaction price of DMC falling to the range of 11000-12500 yuan/ton, a decrease of 500-1000 yuan/ton compared to last week. On the weekend, the bidding price of benchmark enterprises in Shandong remained stable at 11000 yuan/ton, while prices in Jiangxi remained stable due to cost pressures. In terms of segmented products: 107 rubber is priced at 13000-13300 yuan/ton, raw rubber is priced at 13200-13500 yuan/ton, and silicone oil is priced at 14000-14500 yuan/ton.
Market supply and demand analysis: On the supply side, the industry's operating rate remains at a high level of over 75%, and the facilities in Hubei and Zhejiang regions have entered the scheduled maintenance period. On the weekend, major individual factories have released stable price signals, but there has been differentiation in the strength of price hikes among enterprises. On the demand side: Downstream enterprises mainly operate by digesting inventory, the strong bearish sentiment in the market leads to low purchasing willingness, weak performance in the transaction of essential orders, and a significant slowdown in trading pace.
Cost and profit: The price of raw material silicon metal has fluctuated and weakened, but individual factories are generally facing cost inversion pressure, and the industry's loss area has expanded to over 80%. The current DMC price has reached a historical low range, and some companies are beginning to show resistance to price cuts.
Future outlook: The short-term market presents the following characteristics: 1 The price game has entered a critical stage, with 11000 yuan/ton becoming an important psychological barrier; 2. The supply-demand contradiction has not been substantially alleviated, and inventory pressure still exists; 3. There is a strong wait-and-see sentiment in the market, and both buyers and sellers operate cautiously; 4. It is necessary to pay attention to the implementation of maintenance plans by leading enterprises and the pace of terminal demand recovery in the future.