This year's short-term sharp drop in organic silicon has attracted attention from all sectors, greatly reducing the "hype attribute" of organic silicon and beginning to return to the nature of the product (also known as lying flat). As of June 10th, the average price of DMC was 13570 yuan/ton, with a cumulative decline of over 20% in just two months. The latest average price has reached a historic low. According to sources, the entire industry is currently facing difficulties, and upstream and downstream enterprises need to work together. In the short term, the price of organic silicon does face certain technical resistance after a major drop in the early stage, but in the medium to long term, there is no sign of a reversal in the factors driving the downward trend of organic silicon prices (overcapacity).
DMC is the core material of most organic silicon products and a fundamental necessity for almost all downstream categories. The institution pointed out that the DMC of a single plant in Shandong will officially increase production in the second half of the year, with an additional production capacity of nearly 1 million tons. It is expected that the total organic silicon production capacity will reach 7 million tons by 2026, and the compound production capacity growth rate from 21 to 26 will reach 10.3%. The surplus of organic silicon raw materials continues, coupled with the impact of new production capacity trials by multiple individual factories on supply side production capacity, and domestic organic silicon production continues to rise month on month. Multiple individual companies have stated that there have been relatively few recent purchase orders overall. "Now is the off-season for organic silicon consumption, and there are not many downstream orders to replenish inventory. The previous peak of orders was from January to March, mainly targeting the large consumer group. The next peak of replenishment may have to wait until after August," said a sales manager of a single enterprise
China has become the world's largest producer of organic silicon, and with the emergence of price advantages, it is widely used in many industries such as aerospace, electronics and electrical, construction, transportation, chemical, textile, food, light industry, medical, etc. The industry is cyclical and growth oriented. It is reported that the 618 silicon product sales have exploded, with some manufacturers receiving orders and scheduling them until September. Under the rapid iteration and widespread application of downstream products, as well as the rapid growth of industries such as automobiles, electronics, and new energy, the global demand for organic silicon will usher in opportunities for both quantity and price to rise. According to data released by the General Administration of Customs, in terms of export volume, the export volume of organic silicon in April 2024 was 45698 tons, a year-on-year increase of 47.97%; From the perspective of average export price, the average export price in April 2024 was 2678 US dollars/ton, a year-on-year increase of 18.5%. From January to April 2024, the cumulative export volume of polysiloxane in its primary form was 167700 tons, an increase of 27.91% year-on-year. Indicating a sustained recovery in downstream demand in overseas markets, showing a characteristic of not being weak in the off-season. At the same time, with the increasing efforts of leading organic silicon giants to go global, overseas demand is expected to continue to grow this year.
Single unit device dynamics: Overall stable, but new capacity trial production is beginning to release, putting pressure on the supply side. The domestic operating rate remains around 69%. Normal operating devices: Dow, Xinyue, Wake, Hesheng, Luxi, Inner Mongolia Xingxing, Inner Mongolia Hengye Cheng, and Yunsurrender load devices: Zhejiang Zhongtian, Hebei Sanyou, Dongyue, Xin'an, Jiangxi Xinghuo, Hubei Xingfa
Metal silicon market: The domestic metal silicon market continues to remain stable, with prices ranging from 13600 to 13900 yuan/ton, and mainstream market grade prices remain stable. The prices of large factories in Xinjiang remain stable, while the market for manufacturers in Yunnan undergoes weak adjustments. The overall market news is lackluster, with average trading on the exchange. The focus is still on wait-and-see sentiment, with more guidance on the news.
DMC Market: In June, the short-term DMC market continued to fluctuate weakly and consolidate, at 13400-14000 yuan/ton. There will be volatility risk in the medium to long term. From the perspective of the contract market, manufacturers did not have any maintenance plans in June, and inventory remained at a moderate level with sufficient spot supply. Business owners have a certain bearish outlook on the future market, and traders have a weak trading mentality. They mainly focus on observing shipments and negotiate actual transactions. Downstream large enterprises may experience temporary maintenance, leading to a decrease in production. In addition, temperatures in various regions are gradually warming up, and demand will weaken due to the influence of the traditional off-season. Close attention will be paid to the ex factory quotation trends and downstream follow-up of major factories in Xinjiang in the future.
Silicone oil market: In June, the domestic silicone oil market saw a narrow adjustment, with mainstream market grades falling by 50 yuan/ton. Anhui's top silicone oil brands reported over 16000 yuan/ton, cracking material silicone oil reported over 13000 yuan/ton, and Dow Xinyue Wacker silicone oil reported 19500-21500 yuan/ton. Recently, the market has continued to be stagnant, and business owners have a wait-and-see mentality. Under cost pressure, stable trading operations continue. Downstream purchases are limited, with small orders being the main focus.
107 glue market: weak adjustment in the domestic 107 glue market. Cost support weakened, with mainstream market grades reported at 13850-14800 yuan/ton. During the shutdown of cracking plants, the price of cracking 107 gum is reported at 13200-13500 yuan/ton, while the market focus of imported 107 gum remains stable at 15500-16500 yuan/ton. However, downstream procurement is mainly focused on essential needs, with lower procurement options and market negotiations for actual orders.