Last weekend, Dow Chemical, the silicone giant, announced an overall increase in the prices of siloxane, polymers, sealants and silicone rubber, up to 10%, with the new price coming into effect on April 1. Other silicone manufacturers and traders, such as Xinyue, Wake, KCC and Maitu, have been following up the price increase, ranging from 5% to 10%.
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Institutional data show that in the first week of March, the domestic silicone market transaction price increased by about 300 yuan/ton. Last week, the transaction price continued to rise by 500 yuan/ton.
Wake Chemicals is responsible for organosilicon business executives told reporters that organosilicon prices have risen all the way since the Spring Festival this year, especially upstream, with different varieties, with an average increase of 10% to 15%.
According to the analysis, the price increase of silicone originates from the rising downstream start-up rate and considerable stock reserve. It is said that the stock of many large downstream factories has been increased to the end of March, resulting in compact single factories row orders, low inventory, organic silicon intermediate DMC quotation continued to pull up.
Baichuan information data show that since March, the start-up rate of domestic organosilicon monomer device 3 has gradually increased, and at present, the start-up rate of domestic devices has been maintained at more than 80%. As of March 14, the total production capacity of single unit units in 14 major domestic monomer production enterprises was about 3.035 million tons.
“At present, the monomer enterprises start work normally, but the inventory is still at a low level. With the active downstream orders, the peak season of superimposed demand is gradually coming, and the price probability of silicone continues to rise. Yang Owen, an analyst at Chuancai Securities, said.
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The downstream of silicone industry chain also transfers cost pressure through price increase. Following the price increase letter issued by silica gel enterprises at the end of February, only half a month later, some silica gel enterprises issued another price increase letter last week, announcing the price increase of their products.
“With the construction and other industries start to improve, the downstream products of silicone entered the peak demand season in March.” Pu Qiang, an analyst at the Resource and Environment Research Center of Guojin Securities (600109), believes that after a rapid decline in the previous period, the price of silicone products has fallen to a historic low. At present, downstream enterprises have a good desire for low-price purchasing, and the demand for purchasing has also rebounded. The industry is in a state of booming supply and demand. The overall price of products has rebounded, and the profit margin of enterprises has been restored.
“At present, the enterprises are fully started, the market is booming both in supply and demand, the inventory is at a low level, and the downstream orders are in good condition.” Li Wenjing, an analyst at Open Source Securities, predicts that the market will continue to warm up as the peak demand season approaches.
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