The "race track" of the 2025 organic silicon circle has begun, and the choice of track is crucial. A good track means good profits, and various signs indicate that this is just the beginning. A few days ago, in an internal letter from a single enterprise at the end of the year, the general manager predicted that extreme cost control and homogenization of product lines would trigger more intense competition, and the "race track war" would even start from January 2025. The period from 2025 to 2027 will be a new elimination stage for the silicone industry, and we will firmly maintain our confidence in growth and embrace changes in the race track. Looking ahead to the supply-demand pattern in 2025, Mr. Wu analyzed that after experiencing a weak supply-demand pattern in 2024, the overall organic silicon industry will still show a pattern of oversupply throughout the year, but there will be structural supply-demand mismatches. I expect the demand growth to remain around 3% -5% in 2024 and 2025, but the supply side has further added large-scale production capacity on top of the already significant overcapacity, which will lead to profit squeeze in the organic silicon industry chain in 2025. The top enterprises with a large market share and relatively abundant cash flow will maintain resilience.
Monitoring data shows that since the price increase of multiple niche products on January 2nd, the price of vinyl double head has started to rise again on January 6th. The fundamental reason for the price increase of niche products in this round is the supply shortage, and the supply of vinyl double head series is relatively more scarce. As of January 7th, the online price of Luxi hydrolysate is 12300 yuan/ton, the mainstream spot price of DMC is 12800-13700 yuan/ton, the mainstream spot price of raw rubber is 14300-14700 yuan/ton, the mainstream price of 107 rubber is 14000-14200 yuan/ton, the mainstream price of domestic silicone oil is 14800-16500 yuan/ton, and the mainstream price of imported silicone oil is 18500-19500 yuan/ton. 421 # metal silicon is reported at 12500-13100 yuan/ton, chloromethane is reported at 2650-2750 yuan/ton, and high hydrogen silicone oil mainstream is reported at 7500-7800 yuan/ton. Although the overall inventory of individual enterprises remained at a relatively low level of 63600 tons at the end of December, it is understood that in January 2025, there are currently no long-term maintenance plans for domestic individual factories. Only some individual units of Sanyou, Nengtou, and Dongyue plan short-term maintenance. It is expected that the monthly production will increase by about 6500 tons compared to December. At the same time, the delivery of pre-sale orders for major individual enterprises is nearing completion, and the pressure on the supply side will increase in the short term. The strong willingness of individual factories to accept orders and reduce inventory before the Spring Festival may lead to individual enterprises bidding for shipments, and there is a risk of DMC prices falling.
Sudden sanctions, over 130 companies! According to official media reports, on January 6th, the US Department of Defense updated the "Chinese Military Enterprises" list (also known as the "1260H List") in the Federal Register, adding Chinese companies such as Tencent, CATL, Changxin Storage, Mobile Communications, and Daotong Intelligent Aviation. The complete list includes 134 Chinese companies, as well as semiconductor companies such as Changjiang Storage and SMIC. According to the US National Defense Authorization Act for Fiscal Year 2024, listed companies face many restrictions: firstly, starting from June 30, 2026, the US Department of Defense is not allowed to sign, renew, or extend contracts for goods, services, and technology with listed companies and their controlled companies; Secondly, starting from June 30, 2027, contracts for goods, services, and technologies produced or developed by listed enterprises shall not be signed, renewed, or extended by the Ministry of National Defense; Thirdly, entities that have trade relations with the Ministry of National Defense are restricted from cooperating with listed companies.