(Jiangxi New Materials Co., Ltd.)

> Price trend

According to monitoring data, the domestic silicone DMC market was operating stably last week. Affected by environmental protection and other factors, many companies in the market suspended production, resulting in insufficient silicone DMC inventory in the market. At present, the mainstream quotation of domestic silicone DMC is about 14,000 yuan/ton. The market is temporarily out of stock, and the ex-factory quotation of some manufacturers has risen to 15,000 yuan/ton.

(Jiangxi New Materials Co., Ltd.)
Market Analysis

Product: The silicone market showed a stable trend last week, with many companies suspending production due to environmental protection and other factors. The mainstream domestic silicone DMC quotation is around 14,000 yuan/ton. The transaction price has not yet shown a significant increase. The ex-factory quotation of some manufacturers has risen to 15,000 yuan. /Ton. At present, domestic silicone companies have insufficient supply. Although most downstream factories are mainly enquiries, with the consumption of raw materials purchased in the early stage, orders for silicone DMC are gradually increasing. In terms of equipment, due to factors such as environmental protection and G20, some domestic companies have stopped production for maintenance.

Industry chain: At present, the price of silicon metal upstream of organic silicon DMC is basically stable. The ex-factory price of oxygen-impermeable 553# is 9800-9900 yuan/ton, and the price of 3303# is between 10900-11000 yuan/ton. A silicon factory that produces high-grade silicon said that not only has its order volume decreased recently, but there have also been many fewer customers making inquiries. Under this situation, the inventory of individual manufacturers has increased. The equipment start-up load of downstream raw rubber and silicone oil manufacturers is on the low side, and there is a lot of room for negotiation on firm offers. The inventories of manufacturers are reasonable, so we are mainly waiting and watching.

Industry: The G20 Summit will be held in Hangzhou, China, from September 4th to 5th, 2016. Affected by the G20 Summit, Zhejiang Xin’an Chemical Group and Zhejiang Hesheng Silicon Co., Ltd. have stopped production for maintenance. Currently, the ex-factory price of Xin’an is negotiable, and the ex-factory price of Hesheng Silicon is 15,000 Yuan / ton. Inner Mongolia Hengyecheng Group Co., Ltd. has completely suspended production due to the entry of the State Environmental Protection Administration into Inner Mongolia. Shandong Jinling Chemical’s silicone monomer unit with an annual production capacity of 150,000 tons has been suspended for maintenance due to environmental issues. Tangshan Sanyou stopped production for maintenance. Luxi did not accept the order, maybe because it would take a month to stop for maintenance, and Dongyue had a small quantity and could not ship the goods. The reduction in domestic silicone market production capacity and the gradual depletion of market inventory have driven the silicone DMC market to heat up.

Market outlook

Organic silicone DMC analysts believe that domestic organic silicone DMC manufacturers are currently reducing overall operating rates, and some manufacturers have stopped production for maintenance. As a result, the overall domestic production has declined, and the supply and demand relationship has gradually become balanced. At the same time, the price of silicone DMC was low some time ago and there were many downstream orders, which led to the consumption of inventory by manufacturers and insufficient supply of silicone DMC in the market. With the gradual consumption of raw materials in the downstream market, the supply of silicone DMC in the market will be tight. It is expected that the silicone DMC market will be stable and relatively strong in the short term.