It is reported that on the 8th, the mainstream transaction price of domestic organic silicone intermediate DMC increased by 500-1,000 yuan/ton, generally standing at 21,000 yuan/ton, an increase of nearly 5%. This Thursday, the industry will hold a meeting in Zibo, Shandong, where major companies are expected to reach a consensus on future prices, laying the foundation for further price increases in the industry. Since the beginning of this year, DMC prices have increased by more than 10% and have increased by more than 60% from the low in June last year. At present, the inventories of silicone monomer companies remain low, and the output of some companies’ devices is limited. For example, the output of Dow Corning’s 400,000-ton device, the largest domestic production capacity, suffered a malfunction in February and will undergo maintenance in March; Jiangxi Xinghuo’s 400,000-ton device will undergo maintenance in February , currently only 200,000 tons have resumed production; the 65,000-ton unit of Luxi Chemical was unexpectedly shut down due to malfunction this week.
The industry believes that in the short term, factors such as the shortage of organic silicon monomers, rising prices of upstream raw material metal silicon, and rising downstream demand will continue to boost DMC prices. In the medium and long term, after the domestic silicone industry has experienced a sustained downturn caused by overcapacity since 2011, some companies have permanently exited. Under the pressure of environmental protection, existing production capacity is under-operated and new production capacity is limited. The supply and demand pattern of the industry has improved significantly. The prosperity of the silicone industry has exceeded expectations. You can continue to pay attention to silicone monomer manufacturers such as Xin’an Co., Ltd. and Xingfa Group as mentioned last week.
Among A shares:
Xingfa Group: has a production capacity of 180,000 tons of silicone monomer.
Sanyou Chemical: Mainly engaged in soda ash and chemical fiber industries, with organic silicon as its subsidiary industry. The company already has a production capacity of 100,000 tons of organic silicon and will build a new 100,000-ton device at the end of 2014. Sanyou Chemical uses 47% of its silicone for its own use and sells 53% to external parties. Data in early August showed that the operating rate of the 100,000-ton unit was low and inventory was tight. <!–
