As 2024 draws to a close, major manufacturers are rapidly responding to the "anti involution" initiative, and the market is experiencing a strong adjustment. DMC、 Raw rubber, 107 rubber and other products have generally risen by more than 200 yuan, sending a positive market signal. This measure not only boosted industry confidence, but also attempted to bring the price war back onto a rational track. Driven by the buying sentiment, inventory depletion in the middle and downstream markets is accelerating, and currently the mainstream DMC quotation has stabilized at over 13000 yuan. However, due to resistance in price transmission, downstream hoarding behavior is generally cautious.
Although the situation of oversupply has not fundamentally reversed in the short term, in the long run, a continuous downward trend is detrimental to every link in the industrial chain. With the industry generally falling into a state of operating losses, various enterprises have formed a stronger demand for price increases, and the phase of adding new production capacity has come to an end, which has also led to more consensus in the upstream and further enhanced their ability to control prices in 2025. This change means that the bargaining space for small and medium-sized enterprises will further narrow, and the trend of market share tilting towards large companies will become more apparent.
At present, the market generally expects a strong upward trend in December, but whether this rebound can continue and develop into a cross year market still needs to be observed. Taking 107 glue as an example, the domestic market saw a slight increase last week. As of December 20th, the price of 107 glue has risen to 13000-13500 yuan/ton, with a weekly increase of 1.92%. On the cost side, due to the increase in DMC and hydrolysis material prices, the production cost of 107 glue has increased. On the supply side, due to some manufacturers choosing to increase the purchase of hydrolysis materials to reduce costs, 107 rubber production enterprises in Shandong region are facing certain pressure. The price fell below the key price of 13000 yuan at the beginning of the week, but after the inventory pressure eased, the market price began to rise. The current decrease in low-priced goods provides support for manufacturers to further raise prices.
On the demand side of silicone adhesive, the construction adhesive market is gradually entering a off-season, and the Northeast and Northwest regions have basically stopped production, with most construction projects entering the final stage. Although inventory pressure is relatively low, small and medium-sized manufacturers still have a low demand for replenishment in preparation for the holiday season. After the rebound in the price of 107 glue, the demand for this part has increased. The photovoltaic adhesive market is facing a situation of declining demand, with centralized projects in China basically coming to an end, and overseas markets experiencing a slowdown in construction due to the Christmas holiday, resulting in a decrease in overall procurement efforts. To alleviate inventory pressure, photovoltaic adhesive manufacturers have launched a production reduction plan, and it is expected that both supply and demand sides will gradually tend to contract synchronously.
Overall, although the current inventory pressure of 107 glue is still within a controllable range, the transaction performance is still weak. Due to weak demand expectations after the holiday and low winter storage willingness of downstream enterprises, the price of 107 glue may remain stable in the short term.