Recently, the DMC (dimethyl cyclic siloxane) and organosilicon markets have once again received price warnings. In mid to late February, with the dynamic adjustment of the industry's upstream and downstream, a new round of price increases may be fully launched. According to the latest market data, DMC's quotation remained stable between 13400-13800 yuan/ton yesterday. However, most individual factories have quietly initiated production reduction plans and released strong signals of price increases.
This wave of price increases is not groundless. From the supply side, most individual factories increase prices by reducing production, forming a transmission loop of "production reduction cost increase price increase". This strategy not only reduces the supply in the market, but also increases production costs, thereby pushing up product prices. Middle and downstream enterprises have different reactions to this, with some actively stocking up and attempting to lock in costs before price increases; However, another group of companies, due to their high inventory, choose to temporarily observe and wait for the appropriate time to restock at a low price.
On the demand side, as the traditional peak season in March approaches, downstream enterprises have increased their stocking enthusiasm. The orders in the silicon products market remain stable, and the speed of restocking is also accelerating. At the same time, with the warming of temperatures, outdoor work projects are about to resume, and the demand for construction adhesive market is gradually recovering, which also boosts the demand for silicone adhesive enterprises. This series of positive factors undoubtedly provides strong support for the price increase of DMC and silicone markets.
However, it is worth noting that the supply side is still in the dry season, and the differentiation between the north and south is increasing. The operating level of large factories in the north is still relatively high, and some silicon factories in Inner Mongolia have added new silicon furnaces, which is expected to increase supply in the future. This may create some resistance to the price increase trend. But overall, the short-term supply contraction will become the core driving force for price increases.
In addition, from the perspective of the futures market, the price of 421 # silicon metal has stabilized between 11400-12450 yuan/ton, and the futures price continues to fluctuate at a low level. It is expected that there will be significant resistance to the rebound of silicon prices in the short term, and the market will continue to operate at a low consolidation level. This also adds a touch of uncertainty to the price increases in the DMC and silicone markets.
In summary, the DMC and silicone markets are on the eve of a price storm. Multiple factors such as supply side production cuts and price increases, gradual recovery of demand side, and low-level fluctuations in the futures market are intertwined, jointly driving up market prices. In the coming days, whether individual factories will make price adjustments will become the focus of market attention.