Another price increase letter! Yesterday, Dow Chemical Company issued a notice of price increase for its Consumer Solutions Division, which will implement a price increase of approximately 5-10% for orders invoiced on or after September 15, 2024, or from the date allowed by the contract. The news of price increases by multiple leading silicon companies has given some boost to the silicone market, but downstream companies' acceptance ability is still mainly based on orders. Currently, there is a combination of wait-and-see and bullish sentiment in the market, and the market will continue to operate steadily in the short term.
On the supply side, industrial silicon enterprises have had average capacity to reduce production recently. On the one hand, most silicon factories maintain high operating rates, and the market is also filled with spot resources, resulting in a very abundant supply level; On the other hand, the downstream polysilicon and organosilicon markets are also facing the dilemma of supply-demand imbalance, with limited demand for industrial silicon. Therefore, in the increasingly severe situation of oversupply, the current spot prices are plummeting, which provides moderate support for the bottom of DMC prices, but also benefits its rapid recovery of profit margins.
Overall, there is still a risk of oversupply in the DMC market, and there are certain restrictions on the subsequent market price exploration. In addition, everyone is also watching whether the "Golden September and Silver October" can come to continue the rebound market. Therefore, everyone may be cautious in chasing the rise.
The market for precipitated white carbon black: On the raw material side, the supply and demand of sulfuric acid market remain balanced, and prices remain stable; In terms of soda ash, the overall transaction atmosphere in the market is average, and the inventory pressure of some enterprises has not eased. Prices continue to decline, with domestic light alkali prices ranging from 1450 to 2000 yuan/ton and heavy alkali prices ranging from 1500 to 2150 yuan/ton this week, a decrease of 100 to 150 yuan/ton. The continuous weak performance in terms of cost has little impact on the precipitation of white carbon black. The current focus of transactions is still on the demand side, and downstream demand is not lacking in drag, which does not provide significant upward support for the market.

However, in recent times, silicone rubber companies have been driven by the atmosphere of price increases, and most companies have been able to reduce inventory. The digestion of white carbon black is relatively fast, which is conducive to the shipment of precipitated white carbon black manufacturers. At present, the quotation for precipitated white carbon black used in silicone rubber is 6300-7000 yuan/ton, with actual transactions and negotiations being the main focus.
Gas phase white carbon black market: On the raw material side, due to poor order acceptance, the price of methyl trichlorosilane continues to consolidate, and manufacturers in Shandong region have dropped another 200 yuan, with a quotation of 700 yuan/ton. The continuous bottom fluctuation in cost has a certain positive effect on maintaining a slight profit margin for white carbon black shipments. Currently, the high-end quotation of 200% gas phase white carbon black continues to be 24000-27000 yuan/ton, and the low-end quotation is 18000-22000 yuan/ton. From the perspective of orders, the downstream market has been boosted by the "golden September and silver October" trend, and the enthusiasm for stocking has increased to some extent. However, under the weak terminal situation, major manufacturers continue to suppress low prices, and other manufacturers are also struggling to rebound. It is expected that the market will continue to operate at high prices in the short term.
Overall, the level of terminal consumption has not recovered, and the market for organic silicon continues to be poor. Although there are raw materials that have boosted the market, the supply-demand imbalance pattern is difficult to completely improve. There is still a great deal of uncertainty about whether the "Golden September and Silver October" can truly be implemented and fermented. Currently, mid to downstream enterprises still continue to make essential purchases, focusing more on their needs and less on their actions. As a result, individual factories find it difficult to raise prices at all costs, and the supply-demand game remains cautious. In short, whether the rebound market can continue depends on how both the supply and demand sides exert their strength, and we still need to pay more attention to downstream demand trends.