Happy holidays always pass quickly, and the market gradually unfolds in the first week of the Year of the Snake! Today, let's briefly review the pre holiday prices. In January, the organic silicon market showed a weak, stable, and bearish performance. After mid January, mid to downstream enterprises stocked up at a low level, trading turned weak. Single factories mainly delivered pre-sale orders, and some enterprise orders were scheduled until mid February. On January 27th before the holiday, the opening price of DMC and D4 in Shandong single factories was 12600 yuan/ton, while the prices of other single factories remained stable at 12800-13500 yuan/ton. From the supply side perspective, the increase in individual production capacity will significantly slow down in 2025, and the marginal improvement of the industry's supply pattern. However, the addition of about 1.4 million tons of new production capacity in 2024 has not been fully released. Currently, the domestic organic silicon production capacity is about 6.85 million tons, and the annual operating rate of individual units is around 70%. The trend of oversupply is still difficult to reverse by 2025. It is worth paying close attention to that on the one hand, the upstream consensus on "anti internal competition" has been formed, which is not about non competition, but about not engaging in bottomless loss competition; On the other hand, individual enterprises will inevitably accelerate the integration of the industrial chain in order to self digest production capacity, and the supply side contradictions will shift to the middle and lower reaches by 2025. Under the impact of cost reduction in individual enterprises, the middle and lower reaches are forced to actively seek new product development directions and further expand the scope of organic silicon terminal applications.
From the demand side, the real estate policy will continue to be loose in 2025, and the demand for building sealants is expected to recover moderately. However, due to the dominance of the existing housing market, the growth rate is unlikely to exceed 3%. In terms of photovoltaics: On January 21, 2025, the National Energy Administration of China released statistics on the national power industry, showing that as of the end of 2024, the total installed capacity of photovoltaics in China reached 8866.6 million kilowatts (or 88666 MW), an increase of 45.2% from 609.49 million kilowatts at the end of 2023. Among them, in 2024 alone, an additional 277.17 million kilowatts of photovoltaic installed capacity was added, setting a new historical high! In terms of electronic adhesives: According to the research and statistics of DIResaerch, the global scale of electronic packaging materials is showing a steady expansion trend. By 2024, the global scale of electronic packaging materials will reach 37.87 billion US dollars (equivalent to about 271.2 billion yuan), and it is expected to reach 45.21 billion US dollars (equivalent to about 323.7 billion yuan) by 2030, with a compound annual growth rate (CAGR) of 3.00% from 2024 to 2030. High temperature adhesive and liquid adhesive markets: Despite being ravaged by major manufacturers, demand growth is still worth looking forward to, such as in the fields of new energy vehicles, organic silicone leather, smart grids, healthcare, humanoid robots, alternative plastic rubber, and consumer goods. During this Spring Festival holiday, DeepSeek undoubtedly became a shining star in the field of AI. With the continuous iteration of AI models, its abilities such as autonomous decision-making, multimodal perception, generalization/emergence, etc. continue to improve, and the development of the humanoid robot industry is even more rapid. On the stage of the Spring Festival Gala of the Year of the Snake, the wonderful performance of robots made humanoid robots quickly go viral. The explosion of robots+AI may become the first year of commercial mass production of humanoid robots in 2025. Silicone has become one of the most widely used materials for the "skin" material selection of humanoid robots due to its excellent properties. On the negative side: Trump's tariff stick has still been implemented. On February 1st, Trump signed an executive order to impose a 10% tariff on Chinese products exported to the United States. This policy is undoubtedly an "earthquake" targeting the global supply chain and poses new challenges to the export of organic silicon enterprises. According to statistics from the General Administration of Customs, the export volume of primary shaped polydimethylsiloxane in China will be 546000 tons in 2024, a year-on-year increase of 34.3%. Although the new tariff policy has brought challenges to the silicone industry, for Chinese silicone enterprises, on the one hand, the continuous decline in raw materials has led to an improvement in downstream cost-effectiveness, and on the other hand, the gradual withdrawal of old overseas production capacity has resulted in a sustained increase in the global market share of domestic products. It is expected that the impact on the silicone market will be controllable in the short term. Pay more attention to the international trade data and market changes of organic silicon in the future, through in-depth analysis of market trends and flexible adjustment of strategies.
Overall, terminal demand is expected to grow steadily in 2025, but it is still difficult to fully absorb the new production capacity of individual enterprises in the previous two years. The industry is still in a period of clearing up in 2025. Forecast for the first week after the holiday: Pre sale orders from major monomer factories are still acceptable before the holiday, but the trend after the Spring Festival will show a range oscillation under weak supply-demand balance. According to market practice, a good start to the new year is expected with a "good start", but a real price breakthrough still depends on the dual drive of "strong cost support+demand exceeding expectations". Pay more attention to upstream and downstream inventory and resumption of work in the short term. At the beginning of the new year, how will the market change? Organosilicon Mall continues to adhere to the principles of objectivity, fairness, and seeking truth from facts, and will sort out the market situation for everyone one by one. Please stay tuned!