Entering Wednesday, the organic silicon market continued its high-level game pattern. From the current perspective, with the support of pre-sale orders, there is not much fluctuation in the operating load of individual factories, but some large DMC factories mainly rely on self use, and their export volume is shrinking synchronously, further exacerbating the tight supply situation. In this context, midstream and downstream enterprises will accelerate the completion of essential stocking to avoid further increases in procurement costs, forming a good circulation mechanism between supply and demand in the market.
This round of upward trend is boosted by the export demand in the first quarter, and on the other hand, it is due to the continuous reduction of emissions and negative loads in the upstream, and the supply has been in a tight balance, laying a solid foundation for the market to stabilize and increase. Currently, the rebound of organic silicon market has lasted for nearly 5 months, far exceeding industry expectations!
Recently, multiple individual factories have disclosed their pre-sale performance for the first quarter, not only turning losses into profits comprehensively, but also experiencing a sharp increase in net profit. From January to March, Star Technology's net profit increased by 693.65% year-on-year to 1090.48%; Xin'an Corporation's net profit for the first quarter is expected to increase by 171.65% year-on-year to 201.84%; Dongyue Silicon Materials' net profit for the first quarter is expected to increase by 397% to 451% year-on-year!
In the short term, with the support of pre-sale orders and downstream inventory replenishment, individual factories have a strong willingness to raise prices, and DMC prices are expected to maintain strong fluctuations. If terminal demand continues to rebound in the future, it is expected to drive prices further upward.
Raw rubber market: This week, the supply and demand of the raw rubber market maintained a tight balance, with mainstream prices ranging from 15500 to 16000 yuan/ton. On the supply side, in the early stage, individual factories jointly reduced their burden, and there were sufficient pre-sale orders for raw rubber. The delivery cycle of leading factories was extended, resulting in a tight spot market and a firm willingness of enterprises to raise prices. At the same time, with the tight supply of goods, downstream enterprises still have a certain demand for replenishing inventory after constant stocking, which provides price support for raw rubber.
In terms of demand, there has not been a significant increase in terminal orders, and most companies have already released their essential needs in advance, so the current trend of chasing high prices is average. However, due to the shortage of spot goods, rubber mixing enterprises are concerned about the continued rise in costs and are still following up on purchasing. Especially for small and medium-sized enterprises that have been observing in the early stage, they are beginning to accept high prices and are currently catching up with the basic stocking indicators of the leading three vehicles. Enterprises with urgent orders are also following up on spot purchasing, and market transactions are still acceptable.
Overall, driven by cost push and the urgent need for some enterprises to replenish their inventory, the price of raw rubber continues to remain strong. However, the terminal is more resistant to high priced raw materials, and the willingness to stock up on mixed rubber is limited. It is expected that the raw rubber market will show a stable trend of high prices in the short term.