On April 8th, the news of a brief ceasefire between the United States and Iran briefly impacted the commodity market, causing key upstream raw material prices such as crude oil and methanol to fall in response. As a result of this emotional transmission, some organic silicon companies have undergone a subtle shift in their mentality, from firm bullish to cautious bearish, worrying that loose costs will drag down the price correction of organic silicon products. However, the foundation of the ceasefire agreement is extremely fragile, with a lack of substantial mutual trust between the two sides, and geopolitical frictions could resurface at any time. The current closure of the Strait of Hormuz once again means that the energy crisis will continue, and the high volatility risks of bulk raw materials such as crude oil and methanol are still difficult to alleviate. At present, the supply and demand fundamentals of organosilicon are relatively good. Since the beginning of the month, midstream and downstream enterprises have actively completed a round of basic stocking before the release of the upward trend. Although the market's pursuit of gains has decreased compared to the previous period after entering this week, the inventory level in the early stage is sufficient to support individual factories to fill their orders this month. At the same time, the delivery efficiency of some individual factories is average, and the actual delivery cycle has been extended, resulting in tight spot circulation in the market. In this context, even though most midstream and downstream companies have already stocked up on safety stock, there are still some enterprises that have to accept high priced purchases due to urgent production needs. The spot market occasionally experiences high priced small orders, so in the short term, the pressure on individual factory shipments is controllable, and the confidence to raise prices is relatively strong. Even if methanol prices fluctuate in the short term, individual factories tend to stabilize or even explore price increases, rather than following the downward trend. On the other hand, midstream and downstream enterprises are gradually transmitting cost pressures to downstream terminals. Although there are certain obstacles in the process, such as low acceptance of price increases by some end users or difficulty in adjusting long-term contract order prices in real time, overall, the transaction prices of silicone rubber, blended silicone rubber, liquid silicone rubber, silicone products, etc. are showing a slow but firm upward trend, which is driving the market to form a new round of recovery market. It is expected that the silicone market will continue to remain strong in the short term, and it cannot be ruled out that prices will continue to fluctuate upwards due to cost increases.
Industrial silicon: Supply is currently in the most difficult "grinding bottom" stage at the bottom of the cycle. The fluctuation of silicon plant start-up this week is limited, and the wet season in May and June is approaching. The southwest region will gradually resume production, and overall production capacity is expected to increase. On the demand side, polycrystalline silicon enterprises have poor shipments, insufficient production power, and average purchasing sentiment; However, organic silicon monomer factories maintain emission reduction mechanisms and have limited incremental demand for industrial silicon. Overall, the high inventory situation in the industrial silicon market continues, and prices are running weakly. As of April 9th, the closing price of the main futures contract Si2605 was 8260 yuan/ton, and the price of 421 # metal silicon was 9400-10000 yuan/ton, with a weekly decline of 100. It is expected that the industrial silicon market will continue to experience weak fluctuations in the short term.