As the end of the month approaches, the supply and demand game in the silicone market continues, and the overall market is somewhat deadlocked. On site, despite DMC's consecutive price increases, terminal demand remains weak, and midstream and downstream enterprises are unable to keep up smoothly. Some product transactions have even shown an inverted trend, so the market's stocking enthusiasm is average without improving profits. In this situation, DMC continues to rebound with significant resistance, and today's quotation remains stable at 11200-11500 yuan/ton. In the short term, due to the average trading atmosphere for new orders, individual units continue to operate at a reduced load, resulting in weak supply and demand, DMC、 Raw glue and 107 glue are difficult to have significant fluctuations. However, the by-products are greatly affected by the reduction in production of the equipment, and the formaldehyde, crosslinking agent, and gas-phase white carbon black are still immersed in a swelling atmosphere. In addition, there is still cost support for industrial silicon, and major manufacturers continue to stabilize the market with core customer orders. Most manufacturers' pre-sale orders are scheduled until November, so it is expected that DMC prices will remain firm in the short term. In addition, platinum prices have continued to soar this year, with spot prices reaching a 12 year high of $1630 per ounce at one point. The increase since the beginning of the year has been nearly 76%. At the same time, according to the Announcement on Adjusting Value added Tax Policies for Wind Power Generation and Other Industries jointly issued by the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation (No. 10 of 2025), it is announced that the value-added tax preferential policies for multiple industries will be cancelled or adjusted from November 1, 2025. Among them, the relevant value-added tax preferential policies for financing leasing business will be abolished, and the value-added tax exemption policy for platinum and its products in the import link will be cancelled, which will have a particularly significant impact on the precious metal industry. In summary, the increase in platinum prices and the cancellation of tax incentives are a serious challenge for the platinum catalyst industry, directly pushing up production costs for enterprises and further squeezing downstream enterprise profit margins in the short term. The silicone additive factory will continue to adopt a single negotiation strategy and appropriately increase the purchase price of platinum catalyst and vulcanizing agent based on its own chloroplatinic acid.
Industrial silicon: Under the influence of the dry season, the southwest region has entered a seasonal reduction in production and a downward trend in supply side inventory. On the demand side, polysilicon production remains low; The organic silicon monomer device maintains a reduced load operation, with average demand for industrial silicon, and the market oversupply pattern is difficult to change in the short term. However, as the dry season approaches, rising costs in Southwest China will drive a month on month decline in production capacity, coupled with the impact of news coverage, resulting in a strong market stability trend. As of October 20th, the closing price of the main contract for industrial silicon futures Si2511 is 8565 yuan/ton, and the quoted price for 421 # metal silicon is 9800-10300 yuan/ton. It is expected that the market will maintain a volatile pattern in the short term, and the improvement in supply and demand needs to wait for the southwest production reduction to be realized in November. In terms of operating rate: Currently, most individual factories mainly focus on reducing load, especially in the East and Central China regions where individual factories are gradually implementing a 50% load reduction layout, which has to some extent alleviated the risk of inventory accumulation. However, the overall supply from individual factories is still relatively large. If the follow-up of new orders continues to be weak, individual factories with high inventory pressure may continue to reduce production in the future.
On the demand side: According to data released by the National Bureau of Statistics on October 20th, preliminary estimates show that China's gross domestic product (GDP) for the first three quarters of 2025 will be 1.015036 trillion yuan, a year-on-year increase of 5.2% at constant prices. The economy has been steadily improving and high-quality development has achieved positive results in the first three quarters. Against the backdrop of sustained macroeconomic policies and gradual recovery of the private economy environment, there have been some positive signals in the organic silicon market, and the supply-demand pattern has slightly improved. However, as traditional peak season expectations continue to fall short, downstream companies' bearish sentiment has intensified. Currently, the main focus is on digesting orders, and the procurement pace has slowed down. In addition, under the long-term loss situation, the trading sentiment of middle and downstream companies is generally conservative and cautious, and their procurement attitude mainly depends on the substantial recovery of the demand side. Overall, the current atmosphere of terminal demand is difficult to stimulate the enthusiasm of downstream procurement, resulting in a particularly smooth pace of individual factories exploring price increases, with a small push of one hundred at a time. In the future, some production capacity will continue to decline and exit, while the demand side will show substantial recovery. The market will usher in new development opportunities, and organic silicon is expected to experience a true rebound in the market.