Smooth digestion! At present, some individual factories in Shandong have performed well in accepting orders, and other individual factories have basically placed orders until the end of the month. In the short term, inventory pressure is not high, and DMC quotations remain at 13500-14000 yuan/ton. Even under the continuous implementation of emission reduction deployment, DMC supply in some areas has become tight, increasing downstream market bullish expectations. In terms of demand, we are currently in the year-end sprint stage, and some mid to downstream enterprises with high orders and low inventory need to lay out the post holiday market in advance. The current urgent need for stocking is gradually released, further supporting the prices of individual factories and stabilizing market confidence. Overall, driven by the dual support of supply and demand, the upstream and downstream mentality is relatively optimistic, and it is expected that the DMC market price will remain stable and have some upward space in the short term.
107 glue and silicone oil market: This week, the price of 107 glue will continue to be 14200-14500 yuan/ton, and the price of silicone oil will be 15000-15800 yuan/ton. On the supply side, the prices of DMC, the main raw material, remain strong, putting pressure on the production of 107 glue and silicone oil, especially the other cost of silicone oil, silicone ether. In the situation of high sales of raw material Sanjia, the prices are also high, which provides significant cost support for silicone oil. At present, 107 glue and silicone oil companies have a strong willingness to raise prices, and some equipment has declined. In terms of demand, current silicone adhesive companies prioritize the consumption of low-priced raw material inventory in the early stage due to cost transmission pressure. Under the influence of seasons, the demand side shows a regional differentiation of "low in the north and high in the south", with limited overall order growth. They are cautious about purchasing high priced new orders, but year-end essential stock is still in stock, and the market transaction atmosphere is flat. In the short term, as downstream low-priced inventory gradually depletes, the motivation to replenish inventory for essential needs will increase. Some companies may gradually start strategic procurement to avoid higher costs, and the acceptance of demand for prices may slowly increase. Under the combined effect of cost push and replenishment demand, the prices of 107 glue and silicone oil will remain firm and are expected to maintain a fluctuating upward trend.
Cracking material silicone oil market: The price of new materials remains strong, providing price support for cracking material enterprises. Currently, the price of cracking material silicone oil continues to be 12500-13000 yuan/ton. Specifically, under the influence of bullish sentiment in the market, inquiries from silicone rubber companies are still acceptable, and the shipment of cracking materials has improved to some extent. However, the customer base of cracking material companies is relatively single, and downstream silicone rubber companies are facing financial pressure and limited shipments. Although the profitability of cracking material companies has improved, in order to compete for limited orders, companies have eroded their originally considerable profits to a certain extent through bidding strategies to increase prices. In terms of waste silicone gel, the current oversupply is prominent. Cracking material enterprises have been reshuffled in recent years, coupled with multiple unexpected accidents, resulting in a significant reduction in overall production capacity. In the long-term situation of no market for scrap recycling companies, the supply continues to be surplus. Currently, the scrap to goods price of cracking material enterprises has been adjusted to 3400-3500 yuan/ton (excluding tax). In the short term, there is still significant uncertainty in the market. However, under the trend of price recovery, the market continues to digest the previous gains, promoting a gradual balance between supply and demand in the market. It is expected that cracking material enterprises and waste silica gel recyclers will continue to operate smoothly in the short term.
On the demand side: From December 22nd to 23rd, the National Conference on Housing and Urban Rural Development was held in Beijing. During the 14th Five Year Plan period, a total of about 5 billion square meters of newly-built commercial housing were sold nationwide, and more than 11 million units (rooms) of various types of affordable housing and resettlement housing such as urban villages and dilapidated houses were built and raised, benefiting more than 30 million people. The task of ensuring the delivery of buildings and houses has been fully completed. We will continue to promote urban renewal, renovation of old residential areas, and construction of complete communities in 2026. At the same time, the meeting emphasized the need to accelerate the construction of a new model for real estate development, promote the construction of "good houses", promote the research and application of new building materials, and pilot the promotion of the existing housing sales system.
The continuous optimization of real estate policies will help stabilize the expected industrial chain. Among them, projects such as the renovation of old urban communities and urban micro renewal will involve a large number of scenarios such as door and window sealing, curtain wall maintenance, and kitchen and bathroom waterproofing, directly increasing the demand for building sealants, especially silicone sealants. At the same time, the increase in demand for silicone adhesive will also be transmitted upstream, which will have a positive impact on the demand for raw materials such as 107 adhesive and silicone oil. However, currently under the influence of high costs and seasonal demand reduction, silicone rubber companies still focus on small orders for essential needs, with the year-end focus on destocking and payment collection. Currently, Wacker has raised the price of sealant to further stabilize market sentiment. It is expected that silicone rubber companies will continue to issue price increase letters and sell while digesting previous inventory in the future.