There is one day countdown to the end of the month, and in the first week of market opening after the holiday, organic silicon stocks are the first to have a good start. Many organic silicon stocks have hit the daily limit up one after another, sending an upward signal for the industry's "first meeting" of the Chinese New Year tomorrow, DMC、 107 glue, raw glue, silicone oil ... It is expected to see the first wave of price increases in the Year of the Horse at the beginning of the "Golden Third" period. At present, midstream and downstream enterprises are gradually returning to the market, and market trading activity has significantly increased. From the perspective of the market, the operating level of individual factories remains relatively low. With the support of pre-sale orders, there is not much pressure on shipment, and the overall supply and demand fundamentals are relatively optimistic. With the post holiday replenishment of essential needs in the middle and lower reaches, there has been an improvement in new order transactions. It is expected that after tomorrow's actual controller meeting, individual factories may initiate a new round of price increases, welcoming a good start to the Golden Three! However, it is still necessary to closely monitor the situation of export orders. Some companies are expected to have limited stock up in order to avoid the risk of a decline in export orders in advance.
Overall, the price performance in February remained stable, with the main focus on stocking up in the middle and lower reaches due to urgent needs. However, individual factories maintained a low operating rate during the Spring Festival period, and there is currently no risk of accumulating inventory. Therefore, the current fundamentals are still optimistic, and the market generally has expectations for a good start after the holiday. Next, we will focus on the trading trends of individual factories and the pace of downstream orders.
On the cost side of industrial silicon: on the supply side, after the holiday, silicon plants in the north and south regions basically continued the pre holiday negative load reduction mode, with average production, and the supply side showed a significant contraction trend, providing obvious price support. However, the high inventory of downstream polycrystalline silicon has always suppressed demand, and prices lack upward momentum. At the same time, the operating rate of organic silicon is low, and the industry's emission reduction deployment continues to advance, which limits the demand for industrial silicon.
Overall, there is a clear oversupply situation in the industrial silicon market, with a strong wait-and-see sentiment in the spot market. In the later stages of the holiday, spot prices mainly fluctuated weakly. As of February 26th, the closing price of the main futures contract Si2605 was 8335 yuan/ton, and the spot price of 421 # metal silicon continued to be 9800-10200 yuan/ton. It is expected that the industrial silicon market will continue to consolidate weakly in the short term, with a focus on the resumption of production and start-up pace of major factories in Xinjiang in March.
Precipitation of white carbon black market: On the raw material side, the sulfuric acid market has been operating steadily after the holiday, with low inventory, while downstream maintenance enterprises have gradually recovered, and procurement willingness has rebounded. The overall supply and demand remain in a tight balance, and the sulfuric acid market prices are running at a high level; In terms of soda ash, manufacturers are gradually resuming work. Due to limited inventory during the Spring Festival period, the market fundamentals remain stable. This week, domestic light alkali and heavy alkali quotations continue to range from 890 to 1570 yuan/ton, with some room for negotiation in actual transactions. On the demand side, driven by bullish sentiment in the market, silicone rubber companies quickly resumed work this week, especially rubber compounding companies actively scheduling production, which is conducive to accelerating the inventory consumption of precipitated white carbon black. At present, the price of precipitated white carbon black for silicone rubber is quoted at 6300-7000 yuan/ton, and it is expected that the price of precipitated white carbon black will remain stable in the short term.
Gas phase white carbon black market: On the raw material side, with low production rates and weak supply-demand balance, the Shandong region continues to engage in closed market negotiations. In terms of orders, due to downstream companies' centralized procurement before the holiday, there were good pre-sale orders for gas-phase white carbon black. In addition, core customers also started purchasing at the end of the month, and the current gas silicon transactions are still acceptable, supporting companies to continue to raise prices. At present, the high-end quotation for 200 specific surface area gas-phase white carbon black is 22000-28000 yuan/ton, and the low-end quotation is 15000-18000 yuan/ton. It is expected that the market for gas-phase white carbon black will continue to consolidate at a high level in the short term. Overall, the current organic silicon industry chain is showing a steady recovery trend. Under the support of pre-sale orders, individual factories are experiencing a growing sentiment of rising prices and waiting for an increase. It is expected that the organic silicon market prices will usher in a new round of price recovery next week, catalyzed by the actual control meeting. However, there is a risk of a decline in export demand in mid to late March, and the domestic downstream digestion capacity will be the core factor determining whether the upward momentum will be realized. In the short term, the organic silicon market may show a stable and positive trend.