Comprehensive increase! Sure enough, there was a pleasant surprise in August. Driven by strong macro expectations, Aiken and Xin'an issued consecutive price increase letters, completely igniting market trading sentiment. Yesterday's inquiries were enthusiastic, and the transaction volume of individual factories was considerable. According to our multiple sources, the DMC transaction price was around 13000-13200 yuan/ton yesterday. Several individual factories have limited orders and plan to fully follow suit!
In short, the market atmosphere has been well set, and the long suffering loss situation in the upstream and downstream will be repaired. Although many people are still worried about whether this is another flash in the pan, in terms of the current supply and demand pattern, this rebound has a certain positive side to support the bottom. Firstly, the market has been bottoming out for a long time, and the price war among individual factories is becoming increasingly difficult to continue. Secondly, the market has certain expectations for the traditional peak season. In addition, the industrial silicon market has recently stopped falling and stabilized. Under the expectation of positive macro sentiment, commodities have generally risen, driving the industrial silicon market to rise. Futures continued to rebound yesterday. Therefore, under various factors, although it cannot be said that a 10% increase will be fully implemented, a range of 500-1000 can still be expected.
Precipitation white carbon black market: On the raw material side, the supply and demand of sulfuric acid market are basically balanced this week, with prices fluctuating slightly and stable; In terms of soda ash, the market trading atmosphere is average, and the soda ash market is operating weakly under the supply-demand game. This week, the domestic light alkali quotation is 1600-2100 yuan/ton, and the heavy alkali quotation is 1650-2300 yuan/ton. The fluctuation on the cost side is limited, and the market for precipitated white carbon black is more constrained by the demand side. This week, precipitated white carbon black for silicone rubber remained stable at 6300-7000 yuan/ton. In terms of orders, individual factories have rebounded comprehensively, and the mixed rubber market has been somewhat stimulated by demand. Yesterday, the overall order taking atmosphere has improved to some extent. The demand for precipitated white carbon black is also expected to increase, but in a buyer's market, precipitated white carbon black enterprises have little room for price increases, and can only take advantage of the positive trend in the silicone market to mainly accept more orders. In the long run, they still need to continue to "internalize" and seek a way out. It is expected that the market will continue to maintain stability in the short term.
Gas phase white carbon black market: On the raw material side, the problem of oversupply in the methyl trichlorosilane market intensified on Monday, forcing a significant reduction in the price of methyl methacrylate. The Northwest monomer factory's methyl methacrylate fell 600 yuan, to 1700 yuan/ton, and the Shandong monomer factory also fell 300 yuan, to 1100 yuan/ton. The cost fluctuated downward, and gas phase white carbon black may experience a follow-up decline in the pattern of oversupply. From the demand side, although there is some promotion from macro favorable factors, downstream companies such as room temperature rubber and high-temperature rubber are focusing on DMC, raw rubber, silicone oil, etc. Their stocking performance for gas-phase white carbon black is still average, continuing their strong demand.
Overall, the current high-end quotation for 200 meter gas-phase white carbon black continues to range from 24000 to 27000 yuan/ton, while the low-end quotation ranges from 18000 to 22000 yuan/ton. It is expected that the gas-phase white carbon black market will continue to operate sideways in the near future.
Overall, the silicone market is finally showing signs of rebound. Although the industry is still concerned about the upcoming production of 400000 tons of new production capacity in Luxi, it is difficult to impact the market in August based on the previous process of releasing new production capacity. And the main manufacturers have also changed their style from last year. In order to achieve a return to product value, the two major individual factories in China have taken the lead in issuing price increase letters, which have a certain positive impact on both upstream and midstream and downstream. After all, there is no winner in the price war, and each enterprise will have different choices at different stages between maintaining market share and maintaining profits. From the layout of these two industrial chains, it can be seen that they are the enterprises with the most complete high-end products in China, and the proportion of self use of raw materials is also high. It is understandable to prioritize profits.
In the short term, there are many favorable factors in the market, and the supply-demand contradiction may ease to some extent. The silicone market will show a stable and positive trend. In the long run, supply side pressure is still difficult to get rid of. However, for silicone companies that have lost money for nearly two years, the time to recover is rare, and everyone needs to seize the opportunity and closely monitor the movements of major manufacturers.