Recently, Shinetsu issued a notice stating that starting from July 1st, the prices of all silicone products worldwide have increased by 10%. The main reason for this price increase is that in recent years, due to the soaring prices of raw materials and manufacturing energy, as well as the rise in labor and material prices, the surrounding environment of the product has led to an increase in factory construction and equipment maintenance costs. In addition, logistics costs and auxiliary materials such as product containers are also increasing year by year, and it is expected that costs will further increase and remain high in the future. Relying solely on measures such as reducing manufacturing costs is difficult to absorb the pressure of these cost increases, so it has been decided to implement price adjustments.
The market is paying attention to whether the other three global manufacturers Dow, Aiken, and Wacker are planning to raise prices. It is reported that the upstream individual factories have not yet communicated about price increases. The industry believes that Xinyue's price increase is due to the fact that the products sold belong to relatively high-end and high-tech categories, and demand is growing, so the pressure to increase prices is more urgent. However, it is unlikely that domestic individual factories will increase their prices at present, and the future will depend on the pricing trends of major factories in Xinjiang and Shandong.
According to the Global Organosilicon Network citing relevant information, according to a Xinyue dealer, Xinyue will raise prices in July. The manufacturer's official website has issued a notice to preheat. This price increase will cover the entire range of organic silicon models in Xinyue. As for the reason for the price increase, it is "technological upgrading". If careful attention is paid, Shinetsu attributes most of the reasons for the price increase to the increase in raw materials and various costs, followed by the increase in labor costs.
Returning to the topic of Shinetsu this time, domestic experts believe that in general, when sales continue to decline, manufacturers often make two choices: one is to stimulate sales by lowering prices, and the other is to increase the unit price of loyal customers by raising prices. Currently, Shinetsu is more inclined towards the latter. The news of a suspected price increase in Shinetsu may also stimulate global dealer customers to hoard goods in the short term, while long-term price increases may help boost its performance.
According to the largest domestic silicone distributor, "Xinyue's price increase may trigger a chain reaction. Similar brands of Xinyue, such as Dow, Aiken, Wacker, etc., may also follow the price increase. In the second quarter of this year (April June), silicone sales were poor, and there was still a backlog of silicone products in my warehouse that were not digested at the beginning of last year. These products are definitely going to be discounted for promotion. If the brand issues a price increase notice in the future, it may also limit dealers' discount promotion behavior for inventory products, which will be even more difficult to digest in the future."
Single unit device dynamics: With the arrival of high temperature weather, safety production is becoming more important, and local single unit factories are starting to reduce their load and production.
The increase in production capacity continues to climb, and the domestic operating rate remains around 70%.
Normal operating devices: Dow, Xinyue, Wake, Hesheng, Luxi, Inner Mongolia Xingxing, Inner Mongolia Hengyecheng, and Yuntou
Load reduction devices: Zhejiang Zhongtian, Hebei Sanyou, Dongyue, Xin'an, Jiangxi Xinghuo, Hubei Xingfa
Metal silicon market: The domestic 421 # metal silicon market has fluctuated downward, with mainstream market grades falling by 50-100 yuan/ton to 13550-13900 yuan/ton. The production area has entered a period of abundant water, and the speed of resuming production by large factories has accelerated. The supply side has increased, and the cost side has remained stable. Market transactions have been weak, and merchants have delayed shipments. The intention to engage in trading has clearly weakened, and actual trading is mostly focused on negotiation.
DMC Market: The domestic DMC market continues to operate steadily, with expectations of reduced production due to high temperatures driving market sentiment. Major single factory quotations remain stable, with discussions around 13400-13900 yuan/ton. But downstream restocking is mainly based on demand, and actual orders are negotiated in the market.
Silicone oil market: There has been a slight increase in the domestic silicone oil market, with brand prices in the South China market rising by 50-100 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. The market continues to observe, with the main raw material DMC weak and stable, and the focus of the local market giving way. The domestic supply of goods in Yuanyue has sold for more than 15000 yuan/ton, with sporadic replenishment in urgent need. The cracking material market has a price but no market. It is expected that the market will operate in a narrow range by the end of June, with significant pressure on manufacturers to ship goods and limited downstream inquiries. The market trading atmosphere may continue to be weak.
107 glue market: The domestic 107 glue market is stabilizing again, with stable mainstream market grades. It is reported that the focus of the imported 107 glue market remains stable, at 15500-16500 yuan/ton. The mainstream domestic brand is priced at 13850-14800 yuan/ton. During the shutdown of cracking plants, the price of cracking 107 rubber was reported at 13200-13500 yuan/ton. Last week, the price of cracking material 107 rubber fell, and the market operated weakly. Short term or narrow range fluctuations, pay attention to the raw material market and downstream actual demand situation.
A big rubber mixing factory has an accident! On the evening of June 12th, HD New Materials, a large mixed rubber factory, announced that the company had recently received a notice that its controlling shareholder, Jiangsu XX Investment Management Co., Ltd., had been fined 1.8 million yuan for multiple crimes including false invoicing and bribery. Due to the sluggish market of organic silicon, the performance of HD new materials in recent years has not been optimistic. The data shows that the company's performance has been consistently sluggish in the past three years, with negative net profit after deduction. The annual report shows that from 2021 to 2023, the operating revenue of HD New Materials was 554 million yuan, 365 million yuan, and 235 million yuan, respectively, a year-on-year decrease of 39.88%, 34.16%, and 35.59%, and a continuous decline in revenue for three consecutive years. During the same period, the company incurred losses of 339 million yuan, 46 million yuan, and 25 million yuan in non deductible net profit, respectively, which were negative for three consecutive years, with a cumulative loss of 410 million yuan. Entering 2024, the company continues its trend of losses. In the first quarter of this year, HD New Materials achieved a revenue of 46.1657 million yuan, a year-on-year decrease of 15.76%; The net profit loss was 1.7065 million yuan, compared to a loss of 3.4598 million yuan in the same period last year.