On June 10th, the China Association of Automobile Manufacturers announced its expectation that the export volume of new energy vehicles in China is expected to exceed 4 million units by 2026, an increase of 50% compared to the previous year. The reason behind this is that, influenced by the rise in international crude oil prices, the overseas market's attention to Chinese new energy vehicle models continues to increase. In May, China exported 446000 new energy vehicles, a year-on-year increase of 2.1 times. From January to May, a total of 1.833 million vehicles were exported, an increase of 2.1 times year-on-year. The proportion of new energy vehicles in total automobile exports was about 45%, an increase of nearly 11 percentage points year-on-year.
Observation of the Organic Silicon Market on Tuesday (June 16th): The atmosphere of observing raw rubber is gradually strengthening, and local price competition for mixed rubber is emerging
Entering Tuesday, the overall price of the silicone market remained stable, but the trend of various segmented varieties showed differentiation. The first half of the year is coming to an end, and various upstream and downstream links are adjusting their strategies in the price game, and the market's wait-and-see sentiment continues to heat up. As of June 15th, the pricing range for mainstream organic silicon products has become largely clear. The mainstream offer for DMC remains at 14700-15100 yuan/ton, and transactions from major players are negotiable; The quotation for 107 glue water purification is 14800-15000 yuan/ton, which also provides moderate room for concessions to large customers; The mainstream quotation for raw rubber is 15500-15800 yuan/ton; Dimethyl silicone oil remains stable at 16200-16800 yuan/ton. From the recent trend, there was no significant fluctuation in the prices of various products from June 8th to 15th, and the price game was deadlocked.
A major feature of the current market is that more than half of individual enterprises mainly execute long-term contract order delivery, maintain a high price attitude towards individual orders, and traders are more active in quoting prices. However, downstream material factories tend to be cautious in their procurement mentality, only replenishing small orders based on their own needs, and generally choosing to wait and see after prices stabilize. Various types of news continue to spread in the market, continuously disturbing market sentiment. The overall trading rhythm tends to stabilize, and the market's wait-and-see atmosphere has heated up.
In terms of fundamentals, under the policy of reducing emissions by 40% on the supply side, some individual enterprises have adjusted their emission reduction plans according to their production pace, and upstream supply will enter a contraction channel in the future. However, the current emission reduction transmission still requires a certain period of time, and coupled with the accumulation of stock sources from high construction in May, the short-term supply pressure has not been completely relieved. The current overall market presents a two-way game pattern of "emission reduction policies providing support and weak demand".
Raw rubber market: Strong willingness to raise prices, orderly promotion of order scheduling
In terms of the raw rubber market, production enterprises in major production areas such as Zhejiang, Shandong, Hubei, Inner Mongolia, and Yunnan have a strong willingness to raise prices, with offers maintained at around 15500-15800 yuan/ton. Most manufacturers have stated that orders have been scheduled until early June and are not considering price adjustments at this time. As pending orders are being executed one after another, the inventory of major rubber factories is showing a slight trend of depletion.
Affected by the continuous implementation of a 40% reduction in emissions, coupled with the stable trend of raw rubber prices, raw rubber enterprises are conducting price negotiations with downstream customers, and the game is still ongoing. According to feedback from downstream rubber mixing enterprises, there have been signs of a decline in terminal demand in May. Enterprises generally have low expectations for orders in June, resulting in average follow-up of new rubber orders. However, there was a clear demand for replenishment at the beginning of the month, and some companies entered the market to replenish goods at low prices, providing some support for the market.
Rubber mixing market: hidden differentiation behind stable prices, intensified local competition
In terms of the mixed rubber market, the current mainstream price for conventional hardness mixed rubber is 14.3-14.9 yuan/KG, and the price is temporarily stable. The replenishment pace of downstream silicon products is slow, mainly consisting of small orders for essential needs, with few bulk transactions. Industry analysis points out that the fierce competition in the silicone products market for mixed rubber terminals has led to significant fluctuations in revenue and net profit for mixed rubber enterprises. Although some manufacturers maintain their shipment volume, profitability is extremely difficult.
A noteworthy new change is that some companies in the Jiangsu and Zhejiang regions have begun to adopt a "bloodletting" strategy to grab orders, aggressively targeting the market with low-priced goods, which has had a certain impact on the overall price system of the silicone market and triggered local price competition. Previously, the prices of the two major rubber benchmark companies in Shandong and Xinjiang were running steadily, and the major rubber companies were conducting intensive negotiations with downstream customers on pre-sale orders, and the game continued. Overall, rubber manufacturers plan to reduce production to stabilize prices, but the "price for quantity" strategy is disrupting the direction of price stabilization, and the mixed rubber market has fallen into homogeneous competition.
Industry analysts point out that the key to individual factory quotations in the second half of the year still depends on downstream demand. The current industry generally believes that the price of organic silicon has emerged from a deep downward cycle. From the demand side, emerging fields such as photovoltaics and new energy vehicles still have strong demand. The purchase volume of photovoltaic grade organic silicon will increase by more than 50% in 2025, and the amount of organic silicon used per vehicle in new energy vehicles is seven times that of traditional fuel vehicles. These factors are reshaping the industry's demand structure.
According to multiple institutions' calculations, the domestic silicone industry is expected to experience a supply-demand gap of 112000 to 294000 tons by 2026. After the industry starts joint control in November 2025, the emission reduction ratio will be further increased to 35% in March 2026, and the overall operating rate of the industry will be maintained within a reasonable range of 60% -70%, significantly alleviating inventory pressure. From June to August, a 40% phased coordinated emission reduction will be implemented, and the industry's operating rate will be lowered to 60%. The unified DMC quotation will be 14800 yuan/ton to curb low price competition.
Overall, the average price of organic silicon DMC from June to August will remain at around 14800 yuan/ton, with manufacturers controlling the quantity and reluctant to sell. Pre sale orders have been scheduled until June, and inventory levels are low without pressure. Looking ahead to the fourth quarter, with the arrival of the traditional peak season and the continuous release of demand in emerging fields, the industry's prosperity is expected to exceed expectations, and the profit recovery elasticity in the middle and upper reaches may be greater. The core focus of the subsequent market lies in the actual implementation progress of emission reduction policies, inventory depletion, and the pace of downstream terminal demand recovery.
Overall, the organic silicon market is in a critical stage of "upstream and downstream game, stable and yet to change". The raw rubber market maintains stability through production scheduling orders and price consensus, while the mixed rubber market faces greater challenges due to homogeneous competition and local price reductions. Whether a price breakthrough can be achieved in the second half of the year still requires close attention to the strength of downstream demand recovery and the actual implementation effect of industry coordinated production reduction.