Overview of Organic Silicon Market on May 26th:
In response to the disorderly competition and loss of confidence in the early stage of the market, on May 26th, mainstream silicone monomer factories in China reached a consensus on industry self-discipline and finalized a phased collaborative production reduction plan from June to August. The meeting clarified that the prices of DMC and 107 rubber are 14800 yuan/ton, and the price of raw rubber is 15500 yuan/ton, and set an initial production reduction ratio of 40%, aiming to repair market expectations by controlling quantity and stabilizing prices.
At present, the low-priced pre-sale goods in the market have been fully cleared, and transactions have returned to the cash pricing model, significantly improving the industry order. This action will effectively curb low price competition and accelerate the clearance of small and medium-sized production capacity. With the implementation of production cuts and the promotion of destocking in the future, the supply and demand pattern of the industry is expected to be optimized, promoting the industrial chain to move towards a new stage of high-quality and standardized development.
On May 26th, the average price of DMC in the domestic market was reported at 14850 yuan/ton, and the price remained stable. The individual factory has set a bottom line of 14800 yuan/ton and plans to increase production cuts in June to support prices, but downstream companies are still adopting a wait-and-see attitude. Affected by the rise in coal prices, the cost side supports methanol and silicon metal. In the short term, the market is expected to remain stable, and attention should be paid to the implementation of production cuts.