Recently, the significant surge in raw material prices has attracted widespread attention, with the increase even exceeding 1000! This change has had a profound impact on the silicone market. In response to rising costs, downstream companies of organic silicon have launched price increase proposals, hoping to balance costs and profits by adjusting prices.

On February 19th, the overall performance of the A-share market was strong, with the three major indexes collectively rising, injecting a shot in the arm into the market. More than 4600 individual stocks in the entire market rose, with the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index recording gains of 0.81%, 1.46%, and 2.03%, respectively. In addition, the organic silicon sector also performed well, closing up 1.39%.
Industry insiders point out that the current market is in a window period of "spring agitation", and the domestic economy and policy expectations have improved, providing a good operating environment for the market. However, against the backdrop of soaring raw material prices, the cost pressure on silicone enterprises has significantly increased. In order to maintain normal operations and profit margins, price increases have become an inevitable choice.
On Thursday, the organic silicon market continued to operate steadily. Despite insufficient follow-up of downstream demand, the pace of production reduction by individual factories is gradually increasing, with sufficient pre-sale orders and a continued shortage of spot goods. It is understood that the second round of upward trend may start today or tomorrow. After another wave of replenishment, midstream and downstream enterprises have become more cautious in chasing price increases and adding positions. However, under the stimulus of reduced production and rising prices, individual factories have already placed orders until mid March.
Although midstream and downstream enterprises have expressed doubts about the price increase, individual factories are still steadfastly moving towards the DMC target price. If terminal demand further recovers by the end of the month, midstream and downstream enterprises will gradually digest inventory, and in order to layout peak season market orders in advance, there is a possibility of a resurgence of demand for replenishment. At that time, the upward trend of organic silicon will be stabilized, and it is highly likely to achieve the expected target price of individual factories.