In the last week of May, the silicone market entered a critical period of stocking up. The "price for volume" strategy of leading manufacturers is still being promoted, but the actual effect of increasing volume needs further verification; The pre-sale orders of other individual factories will gradually be delivered, and at the end of the month, they will face a strategic choice: "Should we maintain the high price difference with the leading factories, or synchronize with the decline to strive for new orders?" Currently, most mid to downstream enterprises hold a bearish attitude, and their procurement strategies tend to be conservative: while purchasing small orders according to demand and maintaining low inventory operation, they will wait for the prices of individual factories to loosen, and seize opportunities to replenish inventory at low prices. Under the supply-demand stalemate, some individual factories showed slight looseness in the actual transaction prices of raw rubber and 107 rubber last week, but DMC remained firm in the range of 14800-15200 yuan/ton. Although new orders were flat, the surplus of pre-sale orders and industry consensus on emission reduction still provided fundamental support for it.
It is worth noting that the 61.57% month on month drop in the export volume of organic silicon in April is bearish on the market, and the short-term pressure on overseas demand has to some extent constrained the trading atmosphere in the market.
This week, if the leading factory continues the inverted operation strategy of raw rubber and 107 rubber, it is necessary to focus on whether local individual factories will publicly offer discounts to stimulate new order transactions. Once a clear bidding signal appears or triggers a phase of price reduction, midstream and downstream enterprises are expected to take advantage of the situation to stock up and release the pent up demand for replenishment.