With only 3 days left until August, after a wave of adjustments last week, DMC still couldn't hold on, and the transaction price fell below the 13000 mark at one point. However, compared to the decline in silicon metal, DMC's profit margin is still within a controllable range. August has always been a prelude to stocking up for the Golden September and Silver October. If there is still any hope for this year, it is likely to rely on the Golden September and Silver October. Combined with the current low prices, international silicone giants have also given up the price war and issued price increase letters, releasing a rebound signal (Dragon Head announced that silicone prices will rise comprehensively in August). Based on the feedback we have received in the past two days, although most of the middle and lower reaches still have a bearish sentiment towards the future market, they are increasing their stocking operations at low prices, with stocking levels controlled at around 15-30 days.
At present, in terms of raw materials, the fluctuation of silicon metal is significant, and it has basically not turned its head in 2024. 421 # silicon metal has been breaking through from 16000 at the beginning of the year, falling to 12000+last week, and has fallen nearly 4000 from January to July! At present, the production costs of most metal silicon enterprises have been impacted, and production cuts and shutdowns may increase.
During the transition period in July and August this week, costs will decrease on one side; A letter of price increase from a giant hair on one side; Negative and positive factors are intertwined, and organic silicon may form a brief turning point in the volatile trend, maintaining stability and exploring gains! Although in the long run, oversupply remains unresolved and downward pressure persists, it is also important for many companies to seize short-term fluctuations during the long downward cycle. The last three days of July may be a good opportunity for the low-level layout of the third quarter, but can August of this year replicate last year's rebound and accumulate momentum for the peak season of the Golden September? And let's analyze and discuss together.

107 rubber market: Last week, the domestic 107 rubber market saw stable quotes and weak transactions. As of July 28th, the domestic market price for 107 glue is 13500-13800 yuan/ton. On the cost side, DMC was unable to hold the 13000 mark within the week, and the continuous decline weakened the cost support for 107 glue. On the supply side, the main manufacturers in Shandong region have become the main force in market supply due to their significant price advantages. At the same time, leading enterprises also maintain price stability, resulting in large orders being concentrated in these two advantageous enterprises with good order stability.
In addition, single unit units have generally taken measures to reduce production, and the newly added single unit production capacity has not yet been effectively formed, which has not caused inventory pressure on the 107 rubber market. Other small and medium-sized manufacturers, due to a lack of advantages, mostly transact on demand at clear prices. As the cost center of gravity shifts downwards this week, downstream buyers' willingness to purchase at low prices has increased, and market inquiry activity has also increased accordingly.
Silicone adhesive demand side: Construction adhesive market: recent performance has been poor, and the load on end enterprises has generally remained stable. At the end of the month, the procurement process of 107 adhesive in the construction adhesive industry appears to be relatively slow, which is not only affected by the weak price of DMC, but also due to the lack of confidence in the traditional off-season demand released by the market, resulting in the consumption of construction adhesive remaining at the level of essential demand in the off-season. At the macro level, the Third Plenum of the Central Committee of the Communist Party of China has clarified the path of real estate reform. The government has implemented a combination of policies in finance, land, and the digestion of existing housing, aiming to build a new model for real estate development. It is expected that this will gradually release the demand for home purchases, reduce the housing burden on residents, and inject confidence into the real estate market. The construction sealant market is expected to improve.
In terms of photovoltaic adhesive, manufacturers who have laid out distributed components on a large scale in the early stage may adopt a strategy of selling at a lower price, leading to a downward shift in the overall price center of the distributed photovoltaic market. However, there are signs of recovery in the construction activities of domestic ground power stations, and some large-scale base projects have started one after another. Early orders are expected to be delivered one after another, which will have a certain positive impact on the digestion of photovoltaic adhesives.
The current domestic market price center of 107 glue remains stable. However, the comprehensive support for upstream raw materials has loosened, and short-term gains are difficult to materialize. The improvement in the consumption pattern in August may be limited. Overall, it is expected that the 107 rubber market will mainly consolidate and operate weakly this week.