Business Club News on February 5
(Jiangxi New Materials Co., Ltd.)
1. Price trend
According to the monitoring data of SunSirs, the price of domestic silicone DMC showed a slight downward trend this week. The average domestic ex-factory price at the beginning of the week was 14,057 yuan/ton. The average price of silicone DMC at the weekend was 14,057 yuan/ton, and the price remained stable.
2. Market analysis
Product: The silicone market trend is soft this week. At present, the transactions of domestic silicone companies are average, and the downstream factories are mostly enquiries, with few transactions. The market price of organic silicon this week has basically remained at around 14,100 yuan/ton. The ex-factory price of some manufacturers has dropped to 13,800 yuan/ton, and the actual transaction price is lower. . In terms of equipment, most domestic silicone companies currently focus on order-based operation, and companies give priority to digesting pre-holiday inventory. Considering the current downturn in the downstream market, some manufacturers have begun low-load production.
Industrial chain: At present, the upstream metal silicon market of silicone DMC is priceless and the market continues to be sluggish. The current price of silicon metal has remained stable. This is mainly due to the fact that many silicon metal companies have suspended production and the supply in the spot market is extremely scarce. However, due to the lack of market price and poor demand transactions, the price has not increased. There are many companies in Yunnan that have stopped production, especially in the Kunming market. Basically 90% of them have stopped production. Only 3-4 companies are in production. The price of silicon metal has been raised, but the market spread is not large. In addition, electricity prices in Yunnan have been raised, increasing production costs for enterprises. Downstream demand has decreased, and organic silicone manufacturers are trying to collect payment before the holidays, resulting in a slight price reduction in the organic silicon market.
Industry: In 2015, the operating rate of the silicone monomer industry was basically maintained at full capacity. However, the monomer production capacity base increased in 2015. From this perspective, the operating rate of the monomer industry in 2015 is still mainly on a downward trend. In the past two years, the operating rate of the domestic silicone monomer industry has remained around the mid-range, and the phenomenon of insufficient operating load has become prominent. On the one hand, there has been a lot of new production capacity. In 2014, the new production capacity was about 320,000 tons. In 2015, the new production capacity was 250,000 tons, the production capacity base has increased, but the pace of production growth has been slow and the production capacity utilization rate is low; on the other hand, the tight supply of raw material silicon blocks in 2014 has eased in 2015, but the weak downstream demand has made it even more Obviously, the silicone market in 2015 was “slow in the peak season and even weaker in the off-season.” Market prices frequently hit bottom, and the mentality of individual companies to limit production and protect prices increased significantly during the year.
3. Market outlook
Analysts of Silicone DMC from Business Society believe that as the Spring Festival is approaching, domestic silicone DMC manufacturers have stopped production for the holidays, and cargo transactions have gradually decreased. It is expected that the price of silicone DMC will stabilize at around 14,000 yuan/ton next week.
Relevant listed companies: Dongyue Group (00189.HK), Xin’an Co., Ltd. (600596.SH), Hongda New Materials (002211.SZ).
Contact information of Silicones DMC analyst of Business Society, Tel: 025-83337944, QQ: 347618859.
(Article source: Business Society)