Yesterday was really a black Monday. The three major A-share indexes fell sharply. The Shanghai index fell 5.13% and fell below 3000 points for the first time since July 2020. The number of falling stocks exceeded 4600, and the silicone sector fell almost across the board.


At the same time, the leading organic silicon monomer factory also fell again, down 1000 yuan / ton, DMC reported 27500 yuan / ton, raw rubber reported 28500 yuan / ton, and other monomer factories also said to follow up one after another. Although there were demands for goods preparation in the downstream before May Day, the decline had just started, the downstream was mainly on the sidelines, and there were still profit making transactions in the upstream in order to actively receive orders. It was a drag on the quotation of Shandong monomer factory dominated by spot trading. It is expected that it may continue to fall in the past two days, The middle and lower reaches integrate their own inventory and order factors, and timely enter the site before the festival to prepare some goods.


From the perspective of supply side: at present, the quotation of chemical grade metal silicon 421# Huangpu port is 21700 ~ 22400 yuan / ton, a small drop of 100. Due to the continuous contraction of profit space, the price of metal silicon tends to be stable. In terms of devices: Recently, the early maintenance devices in Shandong have been restarted, and the Zhangjiagang devices are also gradually restarted. In addition, the production of new production capacity is still pressing forward step by step, and the overall supply of goods is sufficient. However, the current price has not touched the downstream stock mood, and most manufacturers are still waiting for further decline, resulting in increased pressure on bidding and shipment of individual factories.


From the demand side, the current decline has been established, but the downstream enterprises do not want to follow up the order immediately. Combined with the market law in March and April, under the sluggish demand of the terminal, each wave of market only lasts for 15-30 days. Even if the goods are ordered at a low level, the middle rebound has pulled up, but it is likely that the goods have not been sold out, or even just arrived, the price has fallen again, and the tossing back and forth is a short. Therefore, in order to avoid getting stuck in the quagmire, the downstream procurement is quite cautious. At present, monomer factories have concentrated on making profits. Some just need to be afraid of a sudden rebound, or prepare goods appropriately. However, if you want to make a large number of transactions before the festival, you may need a wave of strong stimulation and temptation to promote the active admission of the downstream.


On the whole, the current market is not friendly to the middle and lower reaches, and it is a bit strange. The rubber mixing factory does not make money by selling rubber mixture, but by selling raw rubber. The product factory does not make money by selling products, but by selling waste silica gel. The cracking material factory is even worse. It makes no money by selling anything and can't rely on anything.


This situation is caused by the downturn of terminal demand in the final analysis. On the one hand, it has Yi emotional influence. On the other hand, it is not as popular as last year's demand. In addition, 700000 tons of new production capacity was added in the first quarter, which reduced the bullish confidence in the industry. From the perspective of each round of rally this year, the upstream has been a little weak.






Now some optimists are bullish on the market in May and believe that after the easing of Yi situation, the suppressed demand in March and April is expected to be released in May. If the upstream falls again in recent two days, some enterprises may take risks to enter the market. However, from the perspective of the change of supply and demand pattern this year, the upward rebound in the upstream is not arbitrary. It is becoming more and more difficult for the downstream to rely on the market, so more energy needs to be invested to improve product differentiation. In such a severe environment this year, it is still less confrontation and more mutual assistance.