Rise up! DMC silicone oil 'rebounds across the board'! The leader has issued a signal. On August 12th, mainstream quotations for DMC, 107 glue, raw glue, and silicone oil will be available. Check it out now!-Iota

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News > Dynamic industry > Rise up! DMC silicone oil 'rebounds across the board'! The leader has issued a signal. On August 12th, mainstream quotations for DMC, 107 glue, raw glue, and silicone oil will be available. Check it out now!

Rise up! DMC silicone oil 'rebounds across the board'! The leader has issued a signal. On August 12th, mainstream quotations for DMC, 107 glue, raw glue, and silicone oil will be available. Check it out now!

Rise up! DMC silicone oil 'rebounds across the board'! Due to the impact of the Xin'an announcement of price increase and the closure of the Luxi market, there has been a significant increase in the price of organic silicon recently. Monitoring data shows that on August 9th, multiple individual giants in the organic silicon industry chain continued to raise prices for their products. DMC rose 300-500 yuan/ton, reporting 13200-13900 yuan/ton, while raw rubber rose 200-300 yuan/ton, reporting 14500-14800 yuan/ton. The market has responded positively to this. Some industry insiders even believe that DMC prices are expected to return to the level of over 15000 yuan per ton in the second half of the year. The raw material side is differentiated, and the price of 421 # metal silicon for organic silicon is reported at 12300-13100 yuan/ton, with local fluctuations of 100 yuan. The price of monochloromethane is quoted at 2150-2300 yuan/ton, up 100 yuan. At present, the restriction on low-priced orders by individual enterprises also represents that companies are more optimistic about the market in the next six months or so, as the global economy is expected to usher in a mild recovery, and demand for raw rubber, DMC, silicone oil, 107 glue, etc. is expected to maintain steady growth in the medium and long term.
In the latest released research report, industry institutions pointed out that within the current reasonable price range, the price of organic silicon is prone to stability but difficult to rise, and has strong cyclical resilience. In the early stage, the production capacity of organic silicon has been expanded for many years, with a cumulative increase of 30%. From November 2023 to July 2024, the production capacity remained consistently higher than the highest point of the 21-22 price increase cycle, corresponding to a prolonged period of high organic silicon supply in the second half of the year. Therefore, the rebound space of organic silicon prices in the second half of the year is limited, and various products will remain at a low level for a long time. In summary, the supply of organic silicon in the second half of the year is affected by the expansion of monomer production capacity in the first half of the year, which has generally been fixed. It is expected that production capacity will remain high, so the supply will slightly increase in the second half of the year, and organic silicon prices are likely to stabilize but difficult to rise.
Regarding the recent pullback in silicone prices, Mr. Li in the industry believes that from April to July, various silicone product prices experienced a certain degree of pullback after rising, causing fluctuations and pullbacks in individual enterprise contract orders. However, the periodic pullback in product prices is reasonable and predictable, and there is no need to panic too much. He believes that downstream inventory replenishment should not be a gamble on profits. The core of judging the value of profits lies in the continuous improvement of the intrinsic value of the enterprise. Although raw material prices are important, what is important is not short-term low prices, but the stable rise of the central price of the enterprise's products - this is the key factor determining the intrinsic value of downstream enterprises. The recent raw material correction has significantly repaired the downward slope of downstream enterprise profits in the early stage. With the end of the sell-off by holders and the end of the price war among individual enterprises, the pullback of various organic silicon raw material prices may be coming to an end. Some core product prices have already undergone a four month pullback and consolidation, and the downward space is limited, highlighting the value of replenishing inventory.

Currently, Mr. Li has put forward a different view from the pessimistic market expectations regarding the global macroeconomic recovery that the market is concerned about. He believes that the macro situation in the second quarter confirms that the global economy is currently in the stage of bottoming out and rising in the inventory cycle, and will continue to be in this stage in the coming quarters; The Chinese economy, driven by manufacturing exports, has been and will continue to operate in a weak recovery zone. The economy is recovering, but it is not based on the common market habits. This is a significant difference between the current upward trend of organic silicon inventory cycle and history. He believes that unlike the prosperous stage of inventory cycle driven by real estate, infrastructure, exports, and consumption in history, the core highlight of this weak recovery is only the manufacturing industry, and organic silicon is the "MSG of manufacturing industry". On the one hand, based on the current situation of weak recovery, it is difficult for organic silicon prices to reproduce the strong and soaring pattern of 2021; on the other hand, the manufacturing industry, which is the main force of recovery, may not be able to achieve rapid profit growth and rapid recovery of profit margins under internal overcapacity and external anti globalization suppression. The situation of supplementing prices with quantity may become the norm.

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