Recently, the volatility of the silicone oil market has continued to attract market attention, and expectations have been raised again. From a macro perspective, according to data from top manufacturers, although the contract price of silicone oil slightly declined in late June, it has started to turn upwards since the end of June. On July 10th, the average contract price of large brand silicone oil reached 15.7 yuan/kg. However, in stark contrast, the price of cracking material silicone oil. Guangdong cracked silicone oil has been continuously declining since April 1st, while Hubei cracked silicone oil has been fluctuating downward since April 15th. Both are currently at their lowest levels in nearly three months, mostly around 13000 yuan/ton. Although the price of silicone oil has approached the breakeven point, why is the trading volume of cracked silicone oil still "thinning"? Based on a comprehensive analysis of the data, two conclusions can be drawn: firstly, this year's large brand silicone oil is clearly selling better than last year; The second is that major brands in June showed a trend of volume reduction and price increase compared to May.
Monitoring data shows that silicone oil is rebounding again! The range is 100-150 yuan/ton. It is reported that Shinetsu Dow Wacker may launch new price increase negotiations in the second half of the year, mainly targeting functional silicone oil. It is expected that the price increase decision will take effect as soon as 2025. As of July 10th, DMC transactions in Guangdong are mostly between 13500-13700 yuan/ton, raw rubber transactions in Guangdong are mostly between 14300-14700 yuan/ton, 107 rubber transactions in Guangdong are mostly between 13800-14500 yuan/ton, and ordinary silicone oil transactions in Guangdong are mostly between 14800-15700 yuan/ton. According to statistics, before June 2024, DMC in China had already put into operation and added 250000 tons of production capacity, with plans to add 580000 tons in the future. However, considering the poor industry profits and the potential delay in adding new production capacity, as well as the gradient in the investment process of large factories, it is expected that the annual DMC production in 2024 will be 2.4 million tons, a year-on-year increase of 14.3%, higher than the expected 2.3 million tons at the beginning of the year. This is also one of the factors affecting the trend of silicone oil prices.
In recent years, global organic silicon production capacity has been continuously gathering domestically, and domestic silicone oil has developed rapidly, resulting in a significant increase in silicone oil production capacity. The production capacity of modified silicone oils such as vinyl silicone oil, amino silicone oil, block silicone oil, and hydroxyl silicone oil has also rapidly increased, and the domestic production level of silicone oil has significantly improved. However, the products of domestic local enterprises are mostly concentrated in the middle and low end, such as conventional methyl silicone oil, hydrogen containing silicone oil, etc. These products have shown a close symbiotic feature with individual factories in recent years, and market share has gradually shifted to upstream large brand enterprises. The current reduction in quantity and price of large brands, coupled with a mild increase in overall sales revenue, is sending a clear signal to the market that there is no shortage of various types of silicone oil in the market. The current decrease in quantity is not only due to the off-season of silicone oil consumption in summer, but also due to the low price, enterprises and distributors are holding back inventory and reluctant to sell. In addition to the current situation of price and quantity deviation in the silicone oil market, which makes the industry less optimistic, the heavy burden of overcapacity and the pressure on the entire industry are also a major influencing factor.
To put it simply, in a situation where demand is difficult to thrive, the market has not yet fully recovered, and many small and medium-sized silicone oil factories are still gritting their teeth and persevering. At the same time, a group of enterprises are seeing a slight rebound and are "seeing the money", producing at full capacity and expanding output. All of these factors have not fundamentally reversed the oversupply situation in the silicone oil industry. Industry experts believe that in the absence of significant external factors driving it, both sluggish demand and oversupply coexist, making it difficult to be optimistic about silicon oil prices. The current bottoming out rebound should have been positive, but under the dual expectations of sluggish demand and oversupply, it has presented a dual cycle of ice and fire for large brands and cracking plants. The trading volume of major brands fluctuated upwards, while the volume and price of cracking plants fluctuated downwards. Whether a successful reversal can be achieved in the second half of the year remains to be seen.
Abu Dhabi National Oil Corporation (ADNOC) has decided to allocate 40% of its stake in the Ruwais liquefied natural gas (LNG) project to the world's four major energy giants: Shell, Total Energy, BP, and Mitsui Industries. It is expected that these four companies will each hold a 10% stake in the project, which is expected to more than double the UAE's maritime fuel production. It is expected that the annual production will reach approximately 9.6 million tons by the end of 2028. ADNOC plans to transfer an additional 5% stake in the project to another partner, but has not provided specific details.
The monthly tracking data of brand shipments in China's TV market released by Lotu Technology shows that in the first half of 2024, the total number of brand complete machines shipped in Chinese Mainland's TV market will be 16.39 million, down 4.2% year on year. The shipment volumes in the first and second quarters were 8.44 million and 7.95 million, respectively, a year-on-year decrease of 0.9% and 7.5%. In the first half of the year, the total retail sales of television increased significantly by about 10% year-on-year, reaching 52.2 billion yuan, with an average unit price of 3733 yuan, a year-on-year increase of 14.7%. In the first half of the year, the total shipment of the top 8 TV brands in China, including Hisense, Xiaomi, TCL, Skyworth, Changhong, Huawei, Konka, Haier, and their subsidiaries, reached 15.57 million units, a year-on-year decrease of 3.7%.
The sales of new cars by the three major Japanese car dealers in China in June were all lower than the same period last year. With the rapid popularization of new energy vehicles such as pure electric vehicles (EVs) in the Chinese market, Japanese car manufacturers, mainly gasoline vehicles, are facing a tough battle. Toyota's monthly sales were 152100 units, a year-on-year decrease of 12.9%. Toyota has seen a year-on-year decline in sales for five consecutive months. Honda's monthly sales plummeted by 39.0% to 68966 units, marking the fifth consecutive month of decline. Nissan's monthly sales decreased by 23.6% to 52852 units, marking the third consecutive month of decline.