Coatings giant AkzoNobel announced on Tuesday that it plans to merge with Axalta Coating Systems, and the combined company's enterprise value will reach $25 billion. According to the merger agreement, AkzoNobel's shareholders will hold 55% of the shares in the new company, while Axalta's shareholders will hold the remaining 45% of the shares. The merged company will first be listed in both Amsterdam and New York, followed by a single listing on the New York Stock Exchange, and maintain dual headquarters in Amsterdam and Philadelphia. The new company after the merger is expected to have an annual revenue of $17 billion, and the merger is expected to be completed by the end of 2026 to early 2027.
This week, the organic silicon industry has ushered in an important turning point. In the current situation of oversupply, the industry's self-discipline and coordination mechanism has entered a substantive stage of promotion, and the market is showing a comprehensive rebound trend. DMC prices have hit bottom and rebounded, with the lowest transaction price reaching 13100 yuan/ton and a cumulative increase of 2300 yuan/ton.
Downstream products such as raw rubber, 107 rubber, and silicone oil have all shown varying degrees of upward trend. According to industry monitoring data, the mainstream quotation for DMC is 13100-13500 yuan/ton, for 107 rubber it is 13700-13900 yuan/ton, for raw rubber it is 1390-14000 yuan/ton, and for silicone oil it is 14700-15700 yuan/ton. It should be pointed out that despite a significant rebound in prices, the transaction prices of major production enterprises are still in the historically low range. This round of price rebound marks the end of the industry downturn that has lasted for more than three years, and the signal of market bottom reversal is becoming increasingly clear.
Affected by the load adjustment of monomer devices, the supply of intermediate products such as methyl and trimethyl organic silicon by-products has shown a shrinking trend, and the expected increase in products such as coupling agents, gas-phase white carbon black, and crosslinking agents has emerged. Driven by the continuous rise in raw material prices, major silicone adhesive companies have issued price increase notices throughout the week, with price increases generally ranging from 15% to 20%, in order to cope with cost pressures.
From the perspective of supply and demand pattern, domestic demand is gradually returning to normal levels, but the pace of exports has slowed down slightly, and overall supply and demand are relatively stable. It is widely believed in the industry that under the expectation of joint production cuts by major manufacturers, supply will significantly decrease. Although the middle and lower reaches are still observing, the essential orders that should be bought are still gradually entering the market, and high priced new orders are also gradually being executed - it seems that this wave of "anti internal competition" has indeed achieved phased results!
The industry generally believes that the price of organic silicon has already fallen to the bottom. Everyone has the intention to unite and keep warm, and to push prices up together from the production end.
In fact, at the beginning of the year, there was a wave of collaborative operations in the industry, and DMC prices soared to 14000 yuan/ton at that time. However, later on, due to the obvious cost advantage of some manufacturers, once the price reached a certain level, the alliance could not hold on and slowly dispersed.
In the next two to three years, it is estimated that there will not be much new production capacity investment, so there is still a strong willingness in the industry to "raise prices". In addition, the government has now included "anti internal competition" in its top-level planning, requiring the rectification of low price and disorderly competition among enterprises, and promoting the exit of outdated production capacity. At the same time, industry associations have been advocating for the use of self-discipline and collaboration to promote the healthy development of the industry. In this way, moderate collaborative production cuts may gradually become the norm in the industry.
Once this atmosphere is formed, there is hope that the price of organosilicon and the overall profitability of the industry will gradually recover.
For the future trend, industry market insiders have clear expectations: as the industry self-discipline and coordination mechanism enters the later stage, the pricing logic of contracts gradually shifts from the supply side to the demand side, and the sustainability of the upward trend needs to pay attention to the transmission performance on the demand side. They believe that with the continuous improvement of market supply and demand structure, prices still have room for upward movement.