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Silicone "Breeds twice" may be difficult to last

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At the beginning of the year, as downstream manufacturers resumed work and production, and the real estate, textile and other industries are gradually picking up, the price of silicone has gone out of a "V"-shaped reversal market. Especially at the beginning of the New Year of the Ox, the price was nearly one day, showing signs of "twice a score". Monitoring data shows that as of the end of February, the price of organic silicon monomers rose to 24,800 yuan (ton price, the same below), an increase of 8% from the beginning of the year; the price of D4 rose to 25,800 yuan, an increase of 7.5% from the beginning of the year; 107 the price of silicone rubber The price rose to 24,800 yuan, up 8% from the beginning of the year; the price of silicone oil rose to 25,500 yuan, up 8.5% from the beginning of the year.

   The market bottomed out last year and soared

   In recent years, the leading domestic silicone industry has been expanding production steadily. After the previous round of domestic supply-side reforms, there are about 10 existing manufacturers, and the combined production capacity of the top five manufacturers in the industry accounts for approximately 69% of the total production capacity.

   At the beginning of last year, due to the sudden outbreak of new coronary pneumonia, the price of silicone monomers fell for a while. Later, under the favorable conditions of the state's relief policy, it began to bottom out. Especially in November, Zhejiang Zhongtian Dongfang Fluorosilicon Material Co., Ltd. broke out in open-air barrels of high-boiling substances, which aggravated the tight supply and demand of silicone. The subsequent special rectification of safety production and the annual overhaul of the company greatly reduced the release of enterprise production capacity and accelerated the tension of the market for silicone products. The price of silicone monomer once rose to 34,500 yuan, and the price of 107 silicone rubber rose to 3.3. 10,000 yuan, the price of silicone oil rose to 33,500 yuan, the monomer is only one step away from the highest price in history.

   "Price increase tide" is difficult to stop in the short term

  Recently, the increase in raw material prices is one of the main factors contributing to the upward trend of the silicone market.

  Organic silicon raw materials mainly include metallic silicon and methyl chloride. At present, silicon plants in the south are affected by insufficient power supply during the dry season and are temporarily in low operating conditions. After the Spring Festival, the silicone downstream has resumed work, but for the current overall market demand, it is still a drop in the bucket, and the supply of some brands is still tight, leading to a slight increase in the silicon metal market. At present, the price of chemical grade metal silicon 421# Tianjin Port is 14,000 to 14,200 yuan, which forms a certain cost support for the organic silicon market.

   At the same time, the market will also enter the traditional peak demand season in March every year, and the silicone industry itself has ushered in a rising window period. From the perspective of the entire silicone industry chain, the market has increased positive news and downstream replenishment phenomena have increased. With cost support and demand stimulus, DMC is a vital link, and its sales price will inevitably affect the downstream demand side. At present, the price increase of silicone oil, 107 rubber, raw rubber, and rubber compound is relatively obvious, and the upward trend is conducted smoothly.

   In addition, with the help of rising international crude oil prices, and the US House of Representatives voted to pass a new round of US$1.9 trillion economic rescue plan, both will have a significant impact on the global capital market. Under the dual effects of inflation and economic recovery, commodities ushered in a new round of bull market. Yan Dong, Fund Manager of the Quantitative and Derivative Investment Department of Penghua Fund, believes that in terms of inflation, domestic interest rates are trending upwards, but overseas liquidity is still being released. Therefore, domestic liquidity is expected to remain relatively abundant, and most commodity prices will continue to rise. .

   From the market point of view, the obvious price increase trend in the short term will stimulate the increase in the volume of rigid demand. Most monomer manufacturers have already placed orders in the middle and late March. Therefore, it is expected that the short-term "price increase" in the silicone market will be difficult to quell.

   Capacity expansion cannot be underestimated

   At present, the domestic organic silicon market continues to rise, and the upstream metal silicon market is strong, supporting the cost of organic silicon. It also coincides with the peak demand season in March. With multiple positive fundamentals, the market direction is clear. However, the continuous expansion of production capacity this year cannot be underestimated.

On February 26th, Hesheng Silicon Industry stated on the investor interaction platform that the company’s 200,000-ton/year silicone sealant project rectification unit in Shihezi had been successfully commissioned at the end of January. It produced silicone intermediates on February 10 and has now entered the equipment. In the trial operation phase, it is expected to be fully put into operation in June; Inner Mongolia Hengxing Chemical invested 2.1 billion yuan to build a 200,000-ton/year monomer project is also expected to be trial-produced in June; Zhongtian Dongfang Fluorine, which has been shut down for many months due to an unexpected accident last year The silicon organosilicon monomer device may be restarted in March; the 400,000 tons/year organosilicon monomer and supporting projects invested and constructed by Yunnan Energy Investment Silicon Technology Development Co., Ltd. are progressing smoothly.

   With the continuous release of these production capacities and the resumption of work and production of enterprises, the rising market for silicones may not be sustainable.

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