Activate rebound! From the perspective of the DMC market, some individual factories in Shandong rebounded by 100 yuan yesterday, with a DMC quotation of 13500 yuan/ton. This indicates that their orders last week were relatively optimistic, giving them the confidence to raise prices. However, major factories have not yet made any price adjustments, and other enterprises have also maintained their current quotations. Currently, the mainstream DMC quotation is 13500-13900 yuan/ton. From the perspective of the current market pattern, the recent low price transactions are fair, the resilience of monomer plants has increased, and the margin of interest has narrowed. However, there are still downside risks at the cost side, the demand side sustained orders are not awesome, and the market is still the king of those with low prices. Everyone can only continue to work on the secret bargaining. The bidding mode continues to negotiate in secret, and it is expected that the market will still maintain a stable operation this week.
Cost side: Recently, the industrial silicon futures market has experienced a rise and then fell, with the current contract price of si2409 quoted at 11400 yuan/ton, a decrease of 635 yuan; Breaking the new low since the listing of futures! The spot price of 421 # metallic silicon remains stable at 13200-14000 yuan/ton. From an on-site perspective, the operating rate of the Southwest region during the high water season in June has increased, and the production will continue to grow, expected to reach 420000 tons. Last week, the operating rates in Yunnan and Sichuan continued to increase, with a total output of 53500 tons, reaching a new high. Despite the expectation of growth on the supply side, downstream demand remains uncertain. Multiple polysilicon factories are maintaining maintenance and production reduction operations, resulting in a significant decline in demand for industrial silicon compared to before. The organic silicon sector is also experiencing a cyclical decline in demand during the traditional off-season.
Overall, industrial silicon has shown a strong supply and weak demand trend, which to some extent has suppressed the continued rise of the market. Moreover, under the drag of fundamentals, enterprises have no choice but to support the market. The long short game has led to a rapid decline in futures prices. In addition, yesterday the price of chloroform in Shandong region rose again by 100 yuan, with a price of 2100 yuan/ton. Currently, the cost side is volatile and the trend is uncertain. It is necessary to pay more attention to the industrial silicon market situation.
In terms of operating rate: Currently, half of the equipment in a single factory in Southwest China is undergoing maintenance, while the production capacity in East, Northwest, and North China remains at a high level, with an overall operating rate of 72.08%. At the end of the month, with downstream replenishment orders following up and DMC inventory easing, it is expected that the operating rate of individual factories will remain roughly stable at around 70% in the short term.
On the demand side: In the last week of June, the end of month stocking plans for the middle and lower reaches were also launched. However, the growth rate of terminal demand was slow, and the pattern of oversupply cannot be changed. Orders were mainly based on basic needs, and people's enthusiasm for stocking up was not high. And individual factories are not obsessed with fast inventory clearance, after all, high inventory operation has become the norm for some enterprises, and under the "price for quantity" action, the pre-sale and order acceptance situation of individual factories can still be supported, and prices continue to maintain stability and maintain prices! In short, the trading volume at the end of the month is expected to increase, but it is difficult to reach the level of large-scale stocking. It is expected that downstream enterprises will continue to make essential purchases in the short term.
Overall, the strong supply and weak demand pattern in the organic silicon market is difficult to reverse, and it is also difficult to continue making significant price adjustments. The current local rebound has given some upward momentum to individual factories, but whether it can be successfully implemented remains a subject of considerable uncertainty. The current industrial silicon market is experiencing severe volatility, and major manufacturers may also be considering the next steps. Everyone still needs to be vigilant and pay attention to the situation of the raw material end and major manufacturers.