Silicone Mall News - August 1st: On the closing day of July, A-shares experienced a long-awaited surge, with over 5000 individual stocks rising. Why did the surge occur? According to relevant institutions, the heavyweight meeting held two days ago set the tone for economic work in the second half of the year. The emphasis on "the macro policy should be more awesome" and "not only to promote consumption, expand domestic demand, but also to increase residents' income" has reassured the market about economic recovery. The stock market has experienced a sharp rise, and silicone has also welcomed a price increase letter!

In addition, industrial silicon futures also rose sharply yesterday. Driven by various favorable factors, it seems that a new wave of price increases in August is really coming!

At present, the mainstream quotation for DMC is 13000-13900 yuan/ton, and the entire line is operating steadily. On the raw material side, due to the continued downward trend in demand for polycrystalline silicon and organic silicon, industrial silicon enterprises have average destocking capacity. However, the pace of production reduction is accelerating, and the price of 421 # metallic silicon has dropped to 12000-12800 yuan/ton, falling below the cost line. If the price further drops, some enterprises will voluntarily shut down for maintenance. Due to the pressure on warehouse receipts, there is still significant resistance to rebound, and the short-term stabilization is the main focus.

On the demand side, recent macroeconomic policies have played a positive role in the terminal market. In addition, the low prices of individual factories last week have stimulated downstream inquiries, and there may be a round of stocking up before the "Golden September", which is beneficial for individual factories to stabilize prices and rebound. From this, it can be seen that there is currently not much downward driving force in the market, and although there is some resistance to the upward trend, the August market is still worth looking forward to.

107 glue and silicone oil market: As of July 31st, the mainstream price of 107 glue is 13400~13700 yuan/ton, with an average price of 13713.77 yuan/ton in July, a decrease of 0.2% compared to the previous month and a decrease of 1.88% compared to the same period last year; The mainstream quotation for silicone oil is 14700~15800 yuan/ton, with an average price of 15494.29 yuan/ton in July, a decrease of 0.31% compared to the previous month and a year-on-year decrease of 3.37% compared to last year. From the overall trend, the prices of 107 glue and silicone oil are both influenced by major manufacturers and have not undergone significant adjustments, maintaining stable prices.

In terms of 107 adhesive, most enterprises maintained a medium to high level of production. In July, the stocking volume of large silicone adhesive suppliers was lower than expected, and 107 adhesive enterprises did not achieve their inventory reduction targets. Therefore, there was a lot of pressure to ship at the end of the month, and negotiations for discounts were the main focus. The decline was controlled at 100-300 yuan/ton. Due to the different attitudes of individual factories towards 107 adhesive shipments, orders for 107 adhesive were mainly concentrated in two large factories in Shandong and Northwest China, while other individual factories had more scattered orders for 107 adhesive. Overall, the current 107 rubber market is mainly driven by demand, with a slightly average trend of buying at the bottom and hoarding. With another individual factory announcing a price increase, it may stimulate market stocking sentiment, and it is expected that the market will continue to operate steadily in the short term.

In terms of silicone oil, domestic silicone oil companies have basically maintained a low operating load. With limited downstream stocking layout, the inventory pressure of various factories is still controllable, and they mainly rely on secret concessions. However, in June and July, due to the sharp rise of the third tier, the price of another raw material for silicone oil, silicone ether, continued to rise to 35000 yuan/ton, with high costs. Silicone oil companies can only maintain a stalemate, and under the weak demand situation, they can control the quantity of orders and purchases, and the loss face is also precarious. However, by the end of the month, due to the continuous resistance of downstream enterprises such as silicone oil to buying up, the prices of tertiary and silicone oil have fallen from high levels, and silicone ether has fallen to 30000-32000 yuan/ton. Silicone oil has also been resistant to purchasing high priced silicone ether in the early stage, and the recent decline is difficult to affect. Moreover, there is a strong expectation of DMC rising, and silicone oil companies are more likely to operate according to the trend of DMC.

In terms of foreign silicone oil: After the Zhangjiagang plant returned to normal, the tight spot market situation eased, but the domestic and international market conditions were generally average, and agents also lowered prices appropriately. Currently, the bulk price of foreign conventional silicone oil is 17500-19000 yuan/ton, with a monthly decline of about 150 yuan. Looking at August, a new round of price hikes has started, adding confidence to the high prices of foreign silicone oil agents.

Cracking material silicone oil market: In July, new material prices remained stable, and there were not many low-level downstream layouts. For the cracking material market, it was undoubtedly a month of slacking off, as there was little room for price adjustment due to profit suppression. Under the pressure of being low-key, production could only be reduced. As of July 31st, the price of cracking material silicone oil was quoted at 13000-13800 yuan/ton (excluding tax). In terms of waste silicone, silicon product factories have loosened their reluctance to sell and have released materials to waste silicone factories. With the easing of cost pressure, the price of raw materials has decreased. As of July 31st, the quoted price for waste silicone raw materials is 4000-4300 yuan/ton (excluding tax), a monthly decrease of 100 yuan.

Overall, the rise in new materials in August has become increasingly prominent, and cracking materials and recyclers are also expected to take advantage of the situation to receive a wave of orders and rebound slightly. Whether it can be implemented specifically depends on the number of orders received, and more importantly, we need to be wary of recyclers raising the collection price regardless of costs. Seize the market trend and don't be too impulsive. If it leads to no price advantage for cracking materials, after a wave of self excitement, both sides will face a stalemate operation.

On the demand side: In July, on the one hand, the end consumer market was in a traditional off-season, and on the other hand, the decline in 107 glue and silicone oil was not significant, which did not trigger the hoarding mentality of silicone glue enterprises. The centralized stocking action was continuously postponed, and the procurement was mainly focused on maintaining operations and purchasing according to orders. In addition, on a macro level, the real estate economy is still in a low point. Although strong expectations still exist, the supply-demand contradiction in the market is still difficult to resolve in the short term, and residents' demand for buying houses is difficult to concentrate and release. The trading in the construction adhesive market is unlikely to show significant improvement. However, under a stable recovery cycle, there is also room for upward strengthening in the real estate industry, which is expected to form positive feedback on the silicone adhesive market.

Overall, under the impact of strong expectations and weak reality, the silicon market continues to fluctuate, with upstream and downstream companies exploring the game while struggling to bottom out. With the current stable and rising trend, the three companies have already set off a wave of price increases, and other individual factories are likely to brew a magnificent counterattack in August. At present, the sentiment of midstream and downstream enterprises is still somewhat divided, with both bottom fishing and pessimistic bearish views coexisting. After all, the supply-demand contradiction has not substantially improved, and it is difficult to predict how long the subsequent rebound can last.

Based on a 10% increase among major players, DMC, 107 glue, silicone oil, and raw rubber are expected to rise by 1300-1500 yuan per ton. In this year's market, the increase is still very considerable! And in front of the screen, can you still hold back and watch without stocking up?

Some market information:

(Mainstream prices)

DMC: 13000-13900 yuan/ton;

107 glue: 13500-13800 yuan/ton;

Ordinary raw rubber: 14000-14300 yuan/ton;

Polymer raw rubber: 15000-15500 yuan/ton;

Precipitation mixed rubber: 13000-13400 yuan/ton;

Gas phase mixed rubber: 18000-22000 yuan/ton;

Domestic methyl silicone oil: 14700-15500 yuan/ton;

Foreign funded methyl silicone oil: 17500-18500 yuan/ton;

Vinyl silicone oil: 15400-16500 yuan/ton;

Cracking material DMC: 12000-12500 yuan/ton (excluding tax);

Cracking material silicone oil: 13000-13800 yuan/ton (excluding tax);

Waste silicone (burrs): 4000-4300 yuan/ton (excluding tax)

The transaction price varies, and it is necessary to confirm with the manufacturer through inquiry. The above quotation is for reference only and cannot be used as a basis for trading.

(Price statistics date: August 1st)