Recently, the silicone market has undergone a proactive adjustment: individual factories collectively lowered the high prices of DMC, raw rubber, and 107 rubber, and the prices of various manufacturers tended to be consistent, ending the previous stalemate caused by price disparities. At present, the upstream mentality has shifted from sticking to high prices to focusing on price for volume and seeking stability, and plans to further implement production reduction plans to send a bottom controllable signal to the market and stabilize market confidence.
The midstream and downstream markets are showing a differentiated situation. Some companies that were observing in the early stage, under the expectation of upstream supply contraction, believe that the temporary bottom price is close, and coupled with the urgent need to replenish inventory at the end of the month, have begun to build positions on dips in moderation; Another group of companies are more cautious. Under the situation of profit suppression, they have concerns about the implementation of production reduction by individual factories, and due to the continued obstruction of downward transmission of goods, they insist on purchasing according to demand, and bearish sentiment still exists. Overall, although the bearish sentiment has not completely subsided, the mentality of downstream enterprises has shifted from unanimous bearish to exploratory procurement, and the pressure on prices has eased compared to before. Whether subsequent transactions can increase volume still depends on the degree to which production cuts are implemented. Overall, after unified regulation in the upstream, it may enter a stage of stable price digestion to avoid further price control. And some of the essential needs will be released gradually at the end of the month, so the probability of a significant price drop in the future is low. It is expected that DMC prices will stabilize in the short term. If the production reduction is actually implemented, it is expected to stimulate more middle and lower reaches to enter the market and replenish inventory, driving a moderate recovery in transactions.
Industrial silicon: On the supply side, some silicon plants in the southwest region and some large factories in Xinjiang have recently announced plans to resume production. At the same time, with the approaching flood season, electricity prices have been lowered, and production costs have decreased, leading to expectations of an increase in production. The supply side has relaxed expectations. In terms of demand, the polycrystalline silicon sector remains sluggish, while the organic silicon monomer factories continue to purchase on demand. Overall, the industrial silicon market maintains a situation of oversupply, with a moderate process of de conversion in the short term. The futures and spot prices are weak and fluctuating. As of May 28th, the closing price of the main futures contract Si2609 was 8590 yuan/ton; The quotation for 421 # metal silicon is 9400-10000 yuan/ton. In the future, we need to focus on the progress of major factories resuming production and the situation of inventory depletion.
Precipitation of white carbon black market: On the raw material side, the main acid plant equipment is still in the maintenance period, and the supply of sulfuric acid continues to be tight. During the off-season, downstream demand for essential purchases is maintained, and in the weak supply-demand pattern, the short-term sulfuric acid price remains stable; In terms of soda ash, some alkali plants are undergoing maintenance, and the demand side is relatively flat. This week, the quotation for light alkali and heavy alkali continues to be between 950-1570 yuan/ton. On the other hand, currently with the consensus of stabilizing prices reached in the upstream, downstream rubber mixing enterprises have some stock, but under profit pressure, market bearish sentiment still exists. The procurement of precipitated white carbon black is mainly for essential needs, and priority is given to digesting previous inventory. In the short term, under the relatively balanced supply and demand situation in the market, the current quotation for precipitated white carbon black used in silicone rubber continues to be 6800-8000 yuan/ton, and the market is temporarily stable.
Gas phase white carbon black market: On the raw material side, the supply of Class A continues to be tight, and the quotation in Shandong region remains strong at 3300 yuan/ton, with strong cost support. In terms of demand, driven by the new national standard of "no disulfide", downstream gas-phase adhesive production has accelerated, resulting in a continuous increase in demand for gas-phase white carbon black. At present, gas silicon enterprises have stable orders, with high-end quotations ranging from 25000 to 32000 yuan/ton and low-end quotations ranging from 20000 to 22000 yuan/ton for a specific surface area of 200. Under tight supply-demand balance, it is expected that the silicon gas market will maintain a strong operation in the short term. Overall, this week the organic silicon market has gradually become more unified in terms of active price adjustments, with upstream companies shifting towards price stability and promoting production cuts, signaling a bottoming out of the market. Although the mentality of the middle and lower reaches is divided, some companies are tentatively building positions at low prices, and the overall bearish sentiment has eased. In the short term, if the production reduction is effectively implemented, it is expected to trigger a new round of centralized replenishment actions, and the price of organic silicon market may gradually stabilize.