At the beginning of the new year, China's Silicone market ushered in recovery. The financial Associated Press reporter learned from a number of silicone production enterprises that at present, most enterprises have sufficient orders on hand, some orders have been arranged after the Spring Festival, and the production line has maintained a high operating rate to cope with the rising market demand.
Zhang Yingying, an analyst at Zhuo Chuang information, told the financial associated press that under the sharp fluctuation of silicone prices in the early stage, many downstream enterprises have bottomed out their inventory. Superimposed on the stock demand before the end of the year and the growth of overseas orders, the spot supply in the silicone market tends to be tight, and the DMC monomer price also returns to around 30000 / T.
For the profit space of silicone enterprises, a senior person in a silicone industry in Shandong told the financial associated press that the demand and price of silicone rose synchronously, but its raw material metal silicon was relatively stable. The overall profitability of the silicone industry may rise significantly in the first quarter, and the production enterprises are expected to have a good start.
China Overseas simultaneous grab
Organosilicon, that is, organosilicon compounds, including all kinds of small molecular compounds and high molecular polymers. Its downstream products generally include silicone rubber, silicone oil and silicone resin, which are widely used in construction, power, electronics, automobile, textile and other fields. The construction field is the most important terminal application of silicone, accounting for more than 30%.
Since this year, the market price of silicone products has begun to get out of the decline. According to the statistics of Zhuo Chuang information, the current price of silicone DMC products is about 30000 yuan / ton, up 12.74% month on month.
"The recovery of downstream demand is the main reason for the current recovery of silicone prices," Zhang Yingying said. "Previously, silicone prices plummeted. Many downstream enterprises waited and waited for the best time to copy the bottom. The inventory has basically bottomed out. Superimposed on the stock demand before the end of the year, the orders of silicone enterprises have significantly recovered in the near future."
"In fact, the demand for silicone terminal has been quite hot. The sharp fluctuation of silicone price in the early stage led to weak market demand. It is more a game between the upstream and downstream of the industry. Now it is expected that the market will pick up." Executives of a silicone production enterprise in Shandong told reporters.
At the same time, the surge in overseas demand has also contributed to the recovery of the silicone market. The above-mentioned enterprise personage further said, "at present, the silicone price in the overseas market is still high, nearly 10000 yuan / ton higher than the Chinese market price. Many foreign downstream enterprises began to increase procurement from Chinese silicone manufacturers, resulting in a further tightening of the supply and demand of silicone in China."
According to the relevant person in charge of Shandong Dongyue Organosilicon Materials Co.Ltd(300821) (300821. SZ), the main silicone manufacturer in China, compared with the end of the fourth quarter, the demand of the current silicone market has recovered, and the company's orders are also ideal.
Zhejiang Xinan Chemical Indusyrial Group Co.Ltd(600596) (600596. SH) relevant people also told reporters, "the current market demand is really high. There are many orders in China and overseas. Some silicone products of the company have been listed after the Spring Festival."
Zhang Yingying said that considering that the current downstream enterprises still have replenishment demand and there are many pre-sale orders from silicone monomer factories, the overall tight supply and demand situation of silicone may continue. It is expected that the market price of silicone will become stable after further exploration.
corporate profits are expected to improve
The sharp fluctuation of silicone price in the fourth quarter not only stopped downstream enterprises to wait and see, but also slowed down the performance growth of silicone manufacturers.
The reporter noted that the profit growth of Zhejiang Xinan Chemical Indusyrial Group Co.Ltd(600596) and Hoshine Silicon Industry Co.Ltd(603260) (603260. SH), which have released the annual performance forecast, narrowed in the fourth quarter.
According to the data, Zhejiang Xinan Chemical Indusyrial Group Co.Ltd(600596) it is estimated that the net profit attributable to the parent company will reach 2.6 billion yuan to 2.7 billion yuan in 2021, with a year-on-year increase of 344% to 362%, which is significantly lower than the growth rate of 713.70% of the net profit attributable to the parent company in the first three quarters; Hoshine Silicon Industry Co.Ltd(603260) it is estimated that the net profit attributable to the parent company will reach RMB 8.5 billion to RMB 8.7 billion in 2021, with a year-on-year increase of 505.28% to 519.52%, which is lower than that in the first three quarters.
With the recovery of silicone market price, the profit space of relevant enterprises is expected to recover.
According to relevant industry insiders, unlike before, the current downstream demand for aluminum alloy is relatively weak, and the price of metal silicon, the main raw material of silicone, has not increased significantly with the recovery of silicone market, which is undoubtedly a good thing for silicone enterprises.
It is reported that as the main raw material of silicone monomer, metal silicon accounts for about 50% of the production cost of silicone. Taking metal silicon 553 as an example, the current market price of metal silicon 553 is about 18000 yuan / ton. Under the condition that the price of silicone has obviously warmed up recently, the market performance of metal silicon is stable and even declining.
The aforementioned industry insiders said that the sharp rise and fall of the silicone market last year caught the upstream and downstream enterprises of the industrial chain off guard, and the relevant enterprises will avoid the recurrence of a similar situation. It is expected that the silicone market will operate relatively stably in the future, and the profit space of silicone production enterprises will recover, but it is difficult to reach the level of the third quarter of last year.
