(Jiangxi New Materials Co., Ltd.)

Business Club News on March 18

(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 14,142 yuan/ton. The average price of silicone DMC at the weekend was 14,142 yuan/ton. The price has basically remained stable. .

2. Market analysis

Product: The silicone market remained strong this week. After the industry meeting, domestic silicone manufacturers gradually raised their ex-factory quotations. At present, domestic organic silicon companies have sufficient supply, and downstream factories mostly focus on inquiries and have little demand. This week, the market price of organic silicon has risen to 14,000-14,500 yuan/ton, but manufacturers have basically executed orders before the price increase, and the market transaction price is still at About 13,600 yuan/ton. In terms of equipment, domestic silicone manufacturers are currently operating at a relatively high load, with some manufacturers operating at full capacity. Manufacturers have sufficient inventory and weak shipments.

Industry chain: At present, the upstream metal silicon market price of organic silicon DMC is generally rising slowly. In addition, manufacturers are reluctant to sell, the market is in short supply, and the southern region is still in the dry season. As a result, silicon metal companies continue to suspend production, and some downstream companies have found it difficult to purchase suitable sources. In addition, electricity prices in Fujian have been reduced, and some suspended companies are willing to resume production, but there is no movement in other regions. Therefore, the shortage of supply in the silicon metal market continues, and short-term prices continue to rise. There is no obvious large demand from downstream users of organic silicon, and the organic silicon market is mostly dominated by previous orders.

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 from Business Society Organic Silicone DMC believe that the domestic silicone market is currently strong. Although demand from downstream users is not strong, as early orders are gradually completed, silicone manufacturers will work together to increase their quotations. It is expected that the silicone DMC manufacturer market will remain strong next week, and the ex-factory price will be 14,000-14,500 yuan/ton.

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: 025-83337941, QQ: 347618859.

(Article source: Business Society)