Recently, the organic silicon sector has been active, with Hongbai New Materials and Xingfa Group both hitting the daily limit up yesterday, with gains of 10.02% and 10.01% respectively; Changlian Technology, Sanyou Chemical, and Hesheng Silicon Industry also rose accordingly. In addition, both Sanfu Corporation and Hongbai New Materials achieved a triple consecutive board during the week. The current surge in the market is mainly driven by the expected improvement in industry fundamentals and the demand for new energy.
At present, the industry is implementing a 40% collaborative production reduction, coupled with a nearly 80% surge in the price of high-purity silicon tetrachloride for computing power fiber optics. Institutions believe that with the peak of domestic new production capacity and the withdrawal of overseas production capacity, the supply-demand pattern is expected to continue to optimize, the industry's prosperity may be restored, and the medium - to long-term profitability is expected to substantially improve.
Looking back at the current market, although the stable price expectations of core customer orders and the July industry conference have provided some support for individual factory quotations, the actual follow-up of new orders is not good, and there is a widespread phenomenon of secret concessions. The current contradiction in the mentality of individual factories continues to intensify: they are worried that price reductions will trigger market panic, but they are also unwilling to return to a disorderly price war, so they continue to raise prices in the open market; However, the continuous accumulation of inventory pressure has forced it to implement preferential strategies and trade price for quantity towards major customers, gradually shifting the focus of actual transactions. Yesterday, the DMC transaction price fell to 13800-14000 yuan/ton, a general drop of 100-200!
On the demand side, midstream and downstream enterprises are generally bearish on the future market, only maintaining a small amount of essential purchases, and taking the opportunity to lower prices upstream, seeking a lower point. Especially for small and medium-sized enterprises with tight funds, their operations are more conservative, preferring to reduce operating rates rather than bear the risk of price decline, resulting in sluggish market transactions, more inquiries but fewer actual orders, and difficulty in effectively driving demand.
In the short term, there will still be a stalemate between the supply side's production cuts and price increases and the demand side's wait-and-see pressure on prices. The July meeting may further emphasize the coordination of production cuts, but the supply-demand contradiction is difficult to fundamentally alleviate in the short term. It is expected that the market will continue to fluctuate weakly at the end of the month, with limited room for price fluctuations.
Industrial silicon: On the supply side, during the wet season, the number of furnaces opened in the southwest region increased and production slightly rebounded; The operating rate of large factories in the north remains stable, and the overall production capacity remains stable. On the demand side, the resumption of production by major polysilicon factories in June has led to an increase in demand, but the downward trend in prices and high inventory have made procurement enthusiasm average; The joint production reduction in the organic silicon industry continues, resulting in weak demand for industrial silicon. Overall, the fundamentals of industrial silicon are still weak and prices are under pressure. As of June 25th, the closing price of the main futures contract Si2609 is 8445 yuan/ton; The quotation for 421 # metal silicon is 9400-9800 yuan/ton.
The market for precipitated white carbon black: On the cost side, due to repeated geopolitical conflicts and a wait-and-see attitude, sulfur prices have fallen from high levels, but sulfuric acid prices have risen instead of falling, still maintaining a high level of over 2000 yuan; In terms of soda ash, under the pattern of strong supply and weak demand, prices are operating at a low level. The overall cost fluctuation is limited, which provides support for the stock of precipitated white carbon black market. On the demand side, downstream rubber mixing enterprises are mainly driven by rigid demand for the purchase of precipitated white carbon black due to the off-season and limited orders at the terminal; It is worth noting that with the promotion of the new national standard, most rubber mixing plants have laid out sulfur free gas-phase adhesives, which has reduced the demand for precipitated white carbon black. Overall, the game between cost support and weak demand lacks favorable market conditions. At present, the price of precipitated white carbon black for silicone rubber remains stable at 6600-8000 yuan/ton. It is expected to continue weak and stable operation in the short term, with little significant fluctuation.
The market for gas-phase white carbon black: The supply of raw material A is tight, and the quotation in Shandong region remains stable at 3300 yuan/ton. The cost side provides strong bottom support for gas-phase white carbon black. In terms of demand, the downstream traditional silicone rubber field still mainly relies on rigid procurement, with limited overall volume. However, driven by the new national standard policy, most rubber mixing plants are actively laying out "sulfur free gas-phase rubber", driving the continuous growth of rigid demand for gas-phase white carbon black. Overall, the supply of gas-phase white carbon black is still tight, and it is expected that the market price will continue to shift upwards, maintaining a strong operating trend.
From the overall trend of organic silicon, there is currently a strong atmosphere of "buying up, not buying down". Under the traditional off-season, export orders were severely overdrawn in the first quarter, and flat terminal demand continued to suppress downstream stocking confidence. The transaction situation is relatively stagnant, and it is difficult to concentrate and increase volume in the short term. It is expected that the silicone market will continue to remain stagnant and consolidate, with prices running steadily but weakly. Some orders may have further room for negotiation, and the overall fluctuation range is limited.