Rising by 700! New direction, need to reverse the silicone chain?-Iota

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News > Dynamic industry > Rising by 700! New direction, need to reverse the silicone chain?

Rising by 700! New direction, need to reverse the silicone chain?

It's time to adjust the price! Yesterday, relevant personnel from the three major silicone factories simultaneously stated that the timing and magnitude of price adjustments will depend on order data, prospects, and demand side operating rates. Currently, inventory risks have temporarily subsided, but the risk of homogenization excess has increased. We will take all actions we can to support the realization of a strong silicone chain market. We analyze that by 2030, the silicone market will achieve almost doubled growth. Even in the hypothetical scenario of a decline in the silicone market, there will still be a significant increase in demand for silicone, thanks to the increasingly diverse and evolving terminal products of liquid silicone and solid silicone.
Rising by 700! Monitoring data shows that as of August 26th, the mainstream spot prices of DMC in China were reported at 13700-14000 yuan/ton, and the mainstream spot prices of raw rubber were reported at 14700-15300 yuan/ton, a year-on-year increase of 700 yuan. The brand of polymer raw rubber increased by 300 yuan, reporting 15700 yuan/ton. The mainstream quotation for 107 glue is 13900-14300 yuan/ton, and the mainstream quotation for silicone oil is 15200-17000 yuan/ton. 421 # Metal Silicon is reported at 12100-13100 yuan/ton, while Monochloromethane is reported at 2150-2300 yuan/ton. There is still a wait-and-see sentiment. Multiple sources have reported that leading silicone companies have reduced production this week. Hesheng, Dongyue, and Xingfa all stated that there is not much adjustment in the company's operating rate, and the operating rate situation will be disclosed in early September. At present, more than half of the raw rubber orders in the industry are concentrated in these three enterprises, and in the short term, the production plans of these enterprises will become the key focus of changes in the silicone market.
New direction, need to reverse the silicone chain? The latest industry data shows that the silicone industry in Guangdong Province (including liquid glue, solid glue, silicone products, etc.) saw a quarterly revenue growth of about 9% and an annual growth of about 15% in the second quarter. Although the overall logic of the organic silicon market recovery is slow, the silicone industry still shows a strong rebound. The demand for raw rubber remains strong, and the supply of functional silicone continues to be tight. In the future, the expansion of silicone chain production capacity will be concentrated in the field of terminal silicone products, and customized products will be the new direction for the future. The industry believes that in the past, low price strategies were designed to serve growth, but currently, using low prices as a guiding principle is no longer suitable for the changing environment of the silicone market. What major silicone manufacturers need to do is to leverage their advantages, serve the market and users well, and extend and expand on this basis, rather than damaging the healthy ecological environment of silicone through price measures.

Raw rubber market: Most domestic raw rubber markets have raised prices, with mainstream brand market prices fluctuating by 100-200 yuan/ton, reporting 14700-15300 yuan/ton. It is reported that the 3+1 discount model (three cars of raw rubber matched with one car of mixed rubber) offered by leading manufacturers is still the preferred choice for silicone industry chain enterprises. However, the lack of stockpiling on the demand side still puts pressure on the market, causing a certain drag. Macro pressure has eased, and with prices continuing to rise, market sentiment has been digested. We are about to enter the peak season of the Golden September and Silver October, driven by leading companies to rebound and release market gains. There are still few maintenance devices on the supply side, and their performance is weak. The willingness of the demand side to actively purchase is still acceptable. In the future, there will be a game between contract prices and monthly inventory, with a clear rebound trend in orders driving market prices to recover. Spot prices will maintain a weak rebound and inventory clearance will be the main focus.
Rubber mixing market: The focus of the domestic rubber mixing market remains stable, confidence has recovered, and the overall production of rubber mixing enterprises has significantly increased in mid to late August. The spot market price fluctuates by 50-100 yuan/ton, and the mainstream price of conventional products is reported at 13500-13900 yuan/ton. With a large amount of mixed rubber from top manufacturers entering the spot market, the industry believes that raw rubber is likely to rise in September, while conventional mixed rubber is difficult to rise. It is reported that the monthly settlement prices of domestic manufacturers have decreased compared to the previous month. Due to the completion of pre-sales this month, the ex factory prices of joint ventures have been limited, and some joint venture companies, such as Shinetsu, have raised their ex factory prices; From the perspective of terminal demand, the overall demand in August was average, and the high-temperature holiday for silicon product factories continued until the end of the month. Currently, overall procurement remains in high demand, and market demand has not yet started. The market is still in the off-season of sales, and overall transactions are lukewarm.
According to the official website of Wacker China, the completion of the process optimization and improvement project for the annual production of 7000 tons of silicone rubber by Wacker Chemicals (Zhangjiagang) Co., Ltd. and the commissioning of environmental protection facilities have been announced recently. The project started construction on November 1, 2023 and was completed on July 31, 2024. Construction scale: The company plans to use the existing high-temperature vulcanized silicone rubber production workshop ELA2 on its own land for production. The current silicone rubber production line will undergo technological transformation, and production auxiliary equipment such as vacuum pumps, ammonium sulfate evaporation systems, refrigeration units, acid washing and cryogenic systems, siloxane distillation systems, and HDK (white carbon black) conveying systems will be purchased. After technological transformation, the production line process has been optimized and improved, and the production capacity has not changed.

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