On May 30th, the organic silicon sector fluctuated and rose. As of 10:13 on the same day, Sibao Technology and Hesheng Silicon Industry hit the limit up, Dongyue Silicon Materials and Chenhua Shares rose by more than 7%, and Chenguang New Materials rose by more than 5%.
The organic silicon market, which has been dormant for a long time, is rare for such a neat and uniform stock to float red. According to analysis by relevant securities institutions, the supply side of industrial silicon has received good news. The State Council has issued the "2024-2025 Energy Conservation and Carbon Reduction Action Plan", which requires strict access to new non-ferrous metal projects, the energy efficiency of new polycrystalline silicon projects must reach the industry's advanced level, and it is strictly prohibited to implement electricity price discounts on high energy consuming industries. This plan highlights the competitive advantage of major players and hit the limit up yesterday. According to CITIC Construction Investment, the bottom of silicon material prices has basically formed, and the vast majority of enterprises have lost to cash costs under current prices, which is not sustainable. Driven by positive news yesterday, industrial silicon futures climbed again! The main contract si2409 opened at 12715 and closed up 500 to 13075, an increase of 3.98%.
Returning to the market trend of organic silicon, on the last day of May, most midstream and downstream enterprises remained cautious about building positions at the bottom, and the level of on-site destocking was average. However, local covert concessions and feedback of exchanging price for quantity are still acceptable, supporting individual factories to maintain high prices. From the price, it can be seen that although the DMC price fluctuated in May, the adjustment range was very limited due to cost constraints, basically fluctuating between 200 and 300. As of May 31, the mainstream DMC quotation was 13400-13900 yuan/ton, and the actual transaction was between 13400-13500 yuan/ton. The average price in May was 13613.06 yuan/ton, a decrease of 3.55% compared to the previous month and 7.57% compared to the same period last year.
From the trend chart, it can be seen that downstream stocking enthusiasm was not high at the beginning of the month, and major individual factories fought a price war to promote new orders. However, the main focus of major factories was on raw rubber and 107 rubber, maintaining high fluctuations in DMC. With support from other individual factories, DMC achieved a super drop rebound. In the middle and late stages, upstream and downstream enterprises generally entered the stage of digesting orders. As the pre-sale orders of most individual factories gradually came to an end, in order to ensure the follow-up of new orders, local DMC at the end of the month also stimulated stocking with a slight decline. Due to the cost pressure not being relieved, low-priced orders rebounded slightly after a slight improvement.
Overall, under the influence of macroeconomic favorable factors, an increase in energy prices may drive a rebound in industrial silicon prices. However, there is still supply side pressure and uncertain risks in the upward trend. At present, DMC's price hikes and covert concessions are advancing simultaneously, and the stable conclusion in May!
Precipitated white carbon black market: On the raw material side, the overall demand for sulfuric acid market is relatively stable, and enterprises maintain essential procurement, with prices temporarily stable; In terms of caustic soda, due to sufficient orders waiting to be issued by enterprises, the recent delivery of pre orders has been the main focus, and the enterprise's quotation has remained strong. This week, the domestic light alkali quotation was 1900-2450 yuan/ton, and the heavy alkali quotation was 1900-2600 yuan/ton, with a local increase of 100 yuan. The cost surface has not changed much during the month, and it has little impact on the precipitation of white carbon black.
From a demand perspective, the mixed rubber market received average orders in April and May, with intense bidding. Most manufacturers maintained a medium to low level of production, resulting in slow digestion of white carbon black. At present, the quotation for precipitated silica used in silicone rubber is 6300-7000 yuan/ton, with little change within the month. The actual transaction is mainly negotiated. In the future, as the downstream focus is on destocking and procurement remains in high demand, the price adjustment of precipitated white carbon black is limited, and the market remains weak and stable in the short term.
Gas phase white carbon black market: On the raw material side, the main focus is on the stability and small fluctuations of methyl methacrylate and silicon tetrachloride, with no fluctuations in cost. The gas phase white carbon black market is still demand oriented. In May, the high-temperature gas-phase adhesive market has rebounded to some extent, benefiting major factories in accepting orders. It rose by 3000 yuan per ton in the middle of the month, with a quotation of 18000 yuan/ton. A gas silicon enterprise in Inner Mongolia also increased by 1500 yuan, with a quotation of 20000 yuan/ton. This move has given gas silicon enterprises confidence in their prices. At the same time, there is a significant difference in quality among various gas silicon enterprises, and the bidding atmosphere is relatively flat.
Overall, the current high-end price of 200 meter gas-phase white carbon black is 24000-28000 yuan/ton, while the low-end price is 18000-21000 yuan/ton, with a monthly increase of 1500 yuan. It is expected that gas silicon enterprises will maintain stable operation in June.
Overall, the current organic silicon market is showing a pattern of strong supply and weak demand, with upstream and downstream attempting to achieve supply-demand balance by simultaneously reducing production and destocking. However, the overall environmental situation is difficult to artificially reverse, and the "price for quantity" action can only be carried out gradually. Under the constraints of cost and demand, there is limited room for price adjustment. In addition, the cost and order situation of domestic enterprises are very different, and it is difficult for upstream and downstream enterprises to synchronize their production reduction and destocking strategies. The bearish outlook on the market remains unchanged. May will maintain stability and close, while June prices are still prone to decline but difficult to rise. This week, both upstream and downstream trading and stocking continued to be cautious.