The price of organosilicon DMC, which fluctuated greatly last year, rose against the season after the Spring Festival this year. According to the price monitoring data of business agency, as of the end of this week, China’s Silicone DMC was between 35000 yuan and 35500 yuan, an increase of about 4500 yuan / ton or 14.5% over the beginning of February.
Liu Hao, an analyst of Longzhong information industry, told the financial associated press that generally speaking, this is the off-season of silicone, and the inventory of production enterprises is high. It turns out that most silicone enterprises will choose to reduce prices to make profits downstream. However, at the beginning of 2022, the price of silicone has been reduced for a short time, and the price has been rising all the way after the Spring Festival, which is beyond the expectation of people in the industry.
At present, the main downstream products of silicone are 107 glue and dimethyl silicone oil. The downstream products cover many fields, such as construction, electric power, electronics and appliances, automobile, textile, personal care and so on. The market demand has been increasing in recent years. Liu Hao told the financial associated press that the advance rise in silicone prices in this round is directly related to the sharp rise in downstream demand, especially overseas demand. In February, the reference price of 107 glue was 3400036000 yuan / ton, while the price of dimethyl silicone oil was 40 Shenyang Machine Tool Co.Ltd(000410) 00 yuan / ton, both at a high price.
Insiders told the financial associated press that during the Spring Festival, many of China’s large 107 glue and dimethyl silicone oil production enterprises received high price orders from overseas. At present, the supply of overseas 107 glue and dimethyl silicone oil is insufficient, and the products are in short supply. There are more orders to China because the order price is high and can withstand the price rise of upstream silicone. Therefore, after the Spring Festival, many manufacturers of 107 glue and dimethyl silicone oil purchased silicone on a large scale to ensure production. Therefore, the price of silicone rose all the way after the Spring Festival, but the enterprises of 107 glue and dimethyl silicone oil still took goods actively, and there was a shortage of silicone spot in the market.
Liu Hao also told the financial associated press that due to the strong demand for 107 glue and dimethyl silicone oil, many enterprises have insufficient production capacity. In order to make timely delivery, many enterprises also rush to buy Silicone DMC and invite other similar enterprises to carry out agent processing, which further drives up the demand for silicone and supports the price rise.
From the supply side, at present, the inventory of monomer factories of silicone enterprises is low, and even some factories have zero inventory. This phenomenon rarely occurs in previous years. In addition, there are still undelivered downstream orders, and there was a shortage of silicone in the spot market in the last week of February. In terms of operating rate, it is common for silicone enterprises outside China to reduce production in February. Overseas Wacker, Dow and other enterprises cut production sharply last week. Some deep-processing devices of Xinghuo failed and also reduced production Tangshan Sanyou Chemical Industries Co.Ltd(600409) ( Tangshan Sanyou Chemical Industries Co.Ltd(600409) . SH) the silicone device is kept in the state of one start and one stop. In addition, the operation of the new device is unstable and has not been put into the market for the time being. Overall, the operating rate of China’s Silicone capacity was less than 75% last week.
In addition, according to the financial Associated Press reporter, the new silicone production capacity can not supply to the market on a large scale In an interview, the Secretary of Shandong Dongyue Organosilicon Materials Co.Ltd(300821) ( Shandong Dongyue Organosilicon Materials Co.Ltd(300821) . SH) said that although the company’s 300000 t / a silicone monomer unit was successfully put into operation on January 31, 2022, it has basically reached the normal production state, but the production capacity needs to be improved. The Henan Hengxing Science & Technology Co.Ltd(002132) ( Henan Hengxing Science & Technology Co.Ltd(002132) . SZ) silicone project is currently in the trial production stage, and some products are expected to be output in March this year.
In addition, from the raw material side, the metal silicon upstream of silicone is constantly increasing the price, which supports the price increase of silicone Tianfeng Securities Co.Ltd(601162) research report points out that the current shortage of metal silicon is becoming more and more serious, and the grid may continue to rise. The hot demand of silicone downstream still exists, and the peak season continues. At present, policies such as dual control of energy consumption, power restriction and production restriction in many places continue to be implemented, and all kinds of commodity markets are affected. Silicone is no exception. The price of the main raw material metal silicon continues to break the historical high price rise, and the price of silicone will also rise with the support of cost. It is expected that the silicone market will continue to be high and strong in the future, and the price will still rise.
In this regard, Liu Hao told the financial associated press that the current silicone DMC market is good and the spot is limited. The downstream related products are good in terms of supply and demand, forward orders and prices. From the perspective of monomer factories, there is no worry about receiving orders in the short term, there is no pressure on inventory, the downstream takes goods actively, and there is still room for price acceptance. Therefore, in the short term, the price of silicone DMC can show a steady upward trend.
