Soon, DMC rubber leader price or "change"! Will it rise? On May 27th, mainstream quotes for DMC, 107 glue, raw glue, and silicone oil are available. Take a look!
Global Organosilicon Network, May 27th: Currently, there are two factors worth paying attention to. The first is that there is a strong expectation of production reduction in the top monomer production areas. Secondly, there is still no significant improvement in downstream demand, and individual factories are accelerating the delivery and clearing of inventory. In the absence of significant improvement in demand, individual factories have begun to control operating rates, and some manufacturers intend to raise or lower spot prices. As a result, the South China market has begun to repair its first quarter premium valuation. I really didn't expect that the bidding from some DMC raw rubber factories last week "dropped"! As new production capacity products are gradually launched, the supply side has more options for sourcing goods. DMC in Jiangxi, Hebei, Shandong and other regions, as well as new production capacities such as raw rubber and silicone oil, are currently undergoing trial production, with price concessions being the main focus, DMC was around 17000 yuan per ton at the beginning of last month, and now it is around 13500 yuan per ton. The industry believes that in the later stage, the demand side consumption in the middle and lower reaches is mainly based on rigid demand, and prices show a seasonal trend of slight discounts.
In recent times, the prices of China's organic silicon industry chain have been continuously declining, entering an irrational stage. The upstream and downstream enterprises are under pressure, which has a negative impact on the high-quality development of China's organic silicon industry. On the one hand, the prices of the industrial chain continue to decline, and the core upstream industrial silicon DMC、 The prices of raw rubber, 107 rubber, silicone oil and other materials have all fallen below cost, and are in the historical lowest price range. Since April, the price of organic silicon has entered a downward phase, accelerating in May. On May 25th, the latest prices released by multiple individual enterprises showed that the average transaction price of major raw materials, including DMC, raw rubber, 107 rubber, and blended rubber, has dropped to the range of 13000+yuan, and there is no sign of rebound yet. According to previous industry research information, the cost line of general individual enterprises in the industry is currently around 15000 to 16000 yuan/ton, indicating that most organic silicon enterprises are currently selling at a loss.
On the other hand, the production capacity of organic silicon is still expanding, including downstream. Currently, the under construction production capacity exceeds 1 million tons, and the supply of organic silicon for the whole year exceeds twice the demand. Although it has long been known that this year is a year of concentrated upstream and downstream production, the arrival of the real node is still surprising. After DMC prices have fallen below costs, there are still 800000 tons of new production capacity landing in the first half of this year, and the total production capacity (including downstream production capacity) for the whole year will reach 7 million tons. Affected by regional wars, global economic recession and other factors, it is expected that the total global demand for organic silicon this year will be less than 4.5 million tons, indicating a clear oversupply of production capacity.
If this situation continues, it is obviously a vicious cycle that is not conducive to the long-term healthy development of the silicone industry. Moreover, DMC raw rubber, 107 glue, silicone oil and other materials are the core raw materials of the entire silicone industry. If there are problems in the expansion of single enterprise production capacity, it will spread to the entire silicone industry chain. Therefore, the top players are obviously unable to sit still. How to coordinate production reduction and how to differentiate "breakthrough" is urgent. Many industry experts believe that the online price of DMC raw rubber may change, and some varieties may increase by 100-200 yuan/ton.