Partial disk closure! The uptrend is about to strike! The current industry emission reduction plan is being promoted in an orderly manner, and the DMC operating rate has fallen to around 65% this month. With the implementation of the emission reduction plan, the supply side support is further strengthened. Under this influence, some individual factories in Shandong closed down and did not report yesterday, releasing signals of a potential rise and further increasing the market's bullish sentiment. Faced with clear expectations of supply contraction and price increases, some midstream and downstream enterprises, in order to avoid significant cost increases in the future, may inquire in advance to lock in orders, which is expected to further increase market trading volume and promote industry supply-demand rebalancing.
Overall, there has not been a significant improvement in downstream demand at present. If the prices of end products cannot keep up with the rise, the ability of midstream and downstream enterprises to continue to undertake high priced raw materials will be limited. Considering this, it is expected that the prices of the organic silicon market will remain relatively strong in the future, but the upward space and sustainability still need to observe the substantial follow-up of downstream orders. Individual factories may achieve a third round of upward trend with a focus on stability and a moderate increase.
107 glue and silicone oil market: The cost side has released a signal of further increase, which provides strong cost support for the prices of silicone oil and 107 glue. Currently, the price of 107 glue is between 14200-14500 yuan/ton, and the price of silicone oil is between 15000-15800 yuan/ton. On the supply side, with the cost remaining firm and local lockdowns, there is a general expectation in the market for the subsequent price increase of DMC. Even though 107 glue and silicone oil companies have abundant supply, some companies have started to stock up appropriately to balance production costs, and may purchase in batches and small quantities based on DMC production and price changes in the future.
In terms of demand, based on the continuous increase in costs, silicone adhesive companies have successively issued a round of price increase letters, and the cost increase continues to be transmitted to the terminal. Low price sources in the market are gradually being consumed, and high price transactions have increased. However, the current silicone rubber companies are still digesting the second round of rising prices for 107 rubber and silicone oil. If the upstream initiates the third round of rising prices at the end of the month, some silicone rubber may enter the market one after another to implement the second round of rising prices and transactions.
Overall, the rising sentiment of individual factories is gradually spreading downstream. At that time, the prices of 107 glue and silicone oil are expected to follow DMC's synchronous rise, and the market may enter a steady upward stage driven by costs.
Cracking material silicone oil market: New material prices remain firm, cracking material companies have increased their willingness to stabilize prices and accept orders, and market transactions have continued to improve recently. At present, the price of silicone oil for cracking materials has risen to 12500~13000 yuan/ton. Most companies are actively accepting orders based on price advantages. However, under cautious sentiment, some downstream companies still control their inquiries to maintain balance.
In terms of waste silicone, as the end of the year approaches, there is a high risk of repayment, and some waste silicone recyclers are facing a repayment crisis. At present, the demand for rough edges in cracking materials is average, and recyclers are also cautious in their accounts. In this situation, the price of waste silicone gel remains low and stable. This week, the raw edge to goods price of cracking materials is between 3400-3500 yuan/ton (excluding tax).
In the short term, cracking material companies and waste silica gel recyclers will continue to maintain stable operations, and the important task towards the end of the year is still to recover funds.