News from the Organic Silicon Market - August 6:Actual prices show a slight increase. Currently, due to the rebound in raw material prices, downstream players are increasing their inventory levels, and with improvement in order bookings, various manufacturers are adjusting their price hike ranges based on inquiry and actual orders. The transaction price for DMC has continuously moved upwards to the range of 13,000 to 13,200 RMB/ton. Having been suppressed at low levels for an extended period, there is a rare opportunity for profit recovery, and manufacturers are looking to seize this momentum. However, the current market environment is still full of uncertainties, and the demand expectations for the traditional peak season may be limited. Downstream players remain cautious about following price increases for restocking; the current proactive inventory building is mainly driven by low prices, and observing market trends over the next two months shows that the raw material inventory is low. After a wave of essential stock replenishment, the likelihood of continued additional restocking is subject to significant variability.

In the short term, the bullish sentiment is strong, but most single manufacturers remain very cautious about adjusting prices. The actual increase in transaction prices is generally around 100-200 RMB/ton. As of the time of writing, the mainstream price for DMC is still at 13,000 to 13,900 RMB/ton. The restocking sentiment from downstream players remains relatively proactive, with some manufacturers limiting low-price orders, seemingly waiting for major manufacturers to initiate a new round of price increases to further stimulate the rebound trends.

On the Cost Side:In terms of supply, production in the Southwest region remains high; however, due to poor shipment performance, the operating rate in the Northwest region has declined, and major manufacturers have begun to reduce output. Overall supply has slightly decreased. On the demand side, the scale of maintenance for polysilicon manufacturers continues to expand, and new orders tend to be small, leading to general caution in raw material purchasing. While prices of organic silicone are rising, the supply-demand imbalance in the market has not been significantly alleviated, and the purchasing activity remains average.

Overall, due to weakening supply and some recovery in demand, the price support from industrial silicon manufacturers has increased. Currently, the spot price for 421 metallic silicon is stable at 12,000 to 12,800 RMB/ton, while futures prices are also slightly rising, with the latest price for the si2409 contract reported at 10,405 RMB/ton, an increase of 90 RMB. Looking ahead, with limited releases of terminal demand, and an increase in shutdown occurrences among industrial silicon manufacturers, prices are expected to continue stabilizing at low levels.

Capacity Utilization:Recently, several facilities have resumed production, and coupled with the commissioning of some new capacities in North and East China, the overall capacity utilization has slightly increased. This week, many single manufacturers are operating at high levels, while downstream restocking is active, so order bookings for single manufacturers remain acceptable, with no new maintenance plans in the short term. It's expected that the capacity utilization will maintain above 70%.

On the Demand Side:Recently, downstream companies have been encouraged by the DMC price rebound and are actively restocking. The market appears to be optimistic. From the actual restocking situation, various enterprises have received orders recently, with some large manufacturers' orders already scheduled into late August. However, considering the currently slow recovery on the demand side, the restocking capabilities of downstream companies remain relatively conservative, with minimal speculative demand and limited inventory accumulation. Looking forward, if the terminal expectations for the traditional busy season in September and October can be realized, the time frame for price rebound may be prolonged; conversely, the downstream company's restocking capacity will decrease as prices increase.

Overall, the long-awaited rebound has reignited bullish sentiment, prompting both upstream and downstream players to reduce inventories while also boosting market confidence. Despite this, a complete turnaround in supply and demand is still difficult in the long term, making it a positive development for profits to recover temporarily, helping navigate the current challenges. For both upstream and downstream players, the cyclical downtrend has generally seen more decreases than increases; hence, leveraging this hard-earned rebound period is crucial, with the immediate priority being to gain more orders during this rebound phase.

On August 2, the National Energy Administration's Comprehensive Department issued a notice regarding the special supervision of distributed photovoltaic registration and grid connection. According to the 2024 energy regulatory work plan, the National Energy Administration will focus on distributed photovoltaic registration, grid connection, trading, and settlement in 11 provinces, including Hebei, Liaoning, Zhejiang, Anhui, Shandong, Henan, Hubei, Hunan, Guangdong, Guizhou, and Shaanxi.

To implement the central government's decisions effectively, this initiative aims to strengthen the oversight of distributed photovoltaic development and construction, improve management, optimize the business environment, enhance grid connection service efficiency, and promote high-quality development of distributed photovoltaic projects.

News on August 4, 2024: Tianyancha Intellectual Property Information indicates that Guangzhou Jitai Chemical Co., Ltd. has applied for a patent titled "A Type of Organic Silicon Encapsulating Adhesive and its Preparation Method and Application," publication number CN202410595136.5, with an application date of May 2024.

The patent summary reveals that the invention discloses an organic silicon encapsulating adhesive consisting of A and B components. The invention enhances the tensile strength and elongation of the organic silicon encapsulating adhesive by reasonably employing a crosslinking agent containing two alkoxy functional groups and another containing three alkoxy functional groups, achieving a viscosity at 25°C between 1,000 and 3,000 cps, tensile strength exceeding 2.0 MPa, and elongation exceeding 200%. This development meets the needs for electronic product applications.

DMC Prices:

- DMC: 13,000 - 13,900 RMB/ton

- 107 Glue: 13,500 - 13,800 RMB/ton

- Ordinary Raw Glue: 14,000 - 14,300 RMB/ton

- High Polymer Raw Glue: 15,000 - 15,500 RMB/ton

- Precipitated Mixed Rubber: 13,000 - 13,400 RMB/ton

- Gas Phase Mixed Rubber: 18,000 - 22,000 RMB/ton

- Domestic Methyl Silicone Oil: 14,700 - 15,500 RMB/ton

- Foreign Methyl Silicone Oil: 17,500 - 18,500 RMB/ton

- Vinyl Silicone Oil: 15,400 - 16,500 RMB/ton

- Cracking Material DMC: 12,000 - 12,500 RMB/ton (tax excluded)

- Cracking Material Silicone Oil: 13,000 - 13,800 RMB/ton (tax excluded)

- Waste Silicone Rubber (Rough Edges): 4,100 - 4,300 RMB/ton (tax excluded)

In Shandong, one single manufacturing facility is in shutdown, one is operating normally, and another is running at reduced load. On August 5, the auction price for DMC was 12,900 RMB/ton (net water cash tax included), with normal order taking.

In Zhejiang, three single facilities are operating normally, with DMC external quotations at 13,200 - 13,900 RMB/ton (net water tax included for delivery), with some temporarily not quoting, based on actual negotiations.

In Central China, facilities are running at low load, with DMC external quotations at 13,200 RMB/ton, negotiated based on actual sales.

In North China, two facilities are operating normally, and one is running at partial reduced load. DMC external quotations are at 13,100 - 13,200 RMB/ton (tax included for delivery), with some quotes temporarily unavailable and subject to negotiation.

In the Southwest, single facilities are operating at partial reduced load, with DMC external quotations at 13,300 - 13,900 RMB/ton (tax included for delivery), negotiated based on actual sales.

In the Northwest, facilities are operating normally, and DMC external quotations are at 13,900 RMB/ton (tax included for delivery), negotiated based on actual sales.