The silicone DMC market continues to cool

Following the flat end of the "Golden Nine Silver Ten", the silicone DMC market that entered November continued to swallow warmly
.
On November 14, the reference price of silicone DMC was 17,500 yuan (ton price, the same below), compared with November 1, the price fell by 2.
01%.

In the future, the restart of the maintenance equipment will bring about an increase in the supply side of the silicone DMC market, but the demand is still in the off-season, and the cost support has weakened, and the silicone DMC market still has downside
.

Industry operating rates are expected to increase

Wang Xiao, an analyst at Longzhong Information, said that since March, the silicone DMC market has continued to be weak, and the price has been down
.
During the "Golden Nine Silver Ten" period, due to the repeated impact of the epidemic in many places, transportation was blocked, industry concerns increased, and the market as a whole was in a downward state, and the market price of Shandong silicone DMC once reached a low of 17,300 yuan in the year
.

In November, silicone DMC prices continued to decline as the rebound in the industry's operating rate put pressure on the market
.
At present, the industry operating rate is 51.
4%, up about 5% from the beginning of
the month.

From the perspective of device operation, on November 7, the 300,000 tons/year maintenance unit of Dongyue Phase III resumed operation; On November 10, Zhejiang Zhongtian's 100,000-ton/year plant resumed operation
.
Overall, the industry operating rate has rebounded, and the benefits brought by the previous low operating rate have gradually faded, and the price is in a weak finishing pattern
.

Looking forward to the future market, Inner Mongolia Xingxing and Yunnan Energy Investment Silicone DMC plants are scheduled to restart after maintenance in mid-November and late November, respectively; Shandong Jinling parking device has no restart plan; Hesheng Luzhou and Inner Mongolia Hengye Chengcheng reduced negative operation, and the expected plant operating rate was raised to 59.
9%.

Industry insiders believe that the market supply is expected to increase, and the oversupply situation will further intensify
.
In the case of poor production and sales, the market may continue to have room
to decline.

The downward loss of raw materials narrowed

In the past 90 months, Xinjiang, the main production area of upstream raw material silicon metal, was affected by the epidemic, and the market supply was reduced
.
In addition, this year, Yunnan, Sichuan and other places are affected by high temperatures, insufficient hydropower supply, power rationing, silicon metal plant operating rate has declined
.
Supported by insufficient supply, silicon prices maintained a steady upward state at a high level, rising from 20,100 yuan in early September to 22,100 yuan at the end of October, and cost support remained strong
.

Liu Jialin, an analyst at Jinlianchuang, said that due to the high price of raw materials, it continues to erode downstream profit margins, resulting in silicone DMC continuing to be in a state of loss
.
In October, the average monthly loss of silicone DMC reached 2170 yuan
.

In November, the prices of silicon and chloromethane, the two major raw materials of silicone DMC, both fell, cost support weakened, and the profit inversion of silicone DMC manufacturers was generally alleviated, and the loss space narrowed to around
710 yuan.

In the future, there is an expectation of a reduction in the supply of silicon metal 421# in November, and it is unlikely that the market will continue to fall
.
However, the methanol upstream of chloromethane has arrived in Hong Kong due to recent imports, and the new methanol plant in Ningxia will be put into operation within a month, and it is expected that the market may return to weakness again, and the price of chloromethane will be
lowered.

Combined with the above factors, the overall cost of silicone DMC raw materials may show a downward trend, although it is difficult to support silicone DMC in terms of cost, but continuing to benefit downstream can also further narrow the loss space of silicone DMC
.

Weak terminal demand is difficult to change

Demand continues to be sluggish, and the mismatch between supply and demand is an important factor
in the silicone DMC market that has not been able to get out of the haze for more than half a year.

He Junsong, a sales staff member of Jilin Petrochemical, said that because the downstream plant of silicone DMC was affected by the epidemic, the order intake was flat, and its own operation was weak, so the demand for silicone DMC was insufficient
.

In November, the traditional off-season superimposed on the impact of the epidemic dragged down the main market of construction and home improvement silicone rubber, the operating rate of some factories decreased, and the procurement of 107 rubber was also weak, and the weak terminal demand was difficult to change
.
Under the leadership of the buyer's market, the shipment pressure of 107 rubber manufacturers is not reduced, and only the performance of new energy sectors such as photovoltaics and automotive components is acceptable, but the demand for 107 rubber has limited support, and the amount of glue cannot form the main force
.
On the whole, the 107 rubber market is not supported by favorable factors for the time being, and it is expected that the market will be
dominated by weak finishing in the short term.

He Junsong said that imported products in the silicone oil market actively let profits and shipments, dragging down the domestic silicone oil market
.
The global economic downturn has made the linkage of the industrial chain insufficient, real estate data continues to be sluggish, and this year's silicone glue market has been the following behavior
.
In addition, the winter stocking of downstream industries such as spinning and daily chemical is nearing the end, coupled with the earlier Spring Festival this year than in previous years, the lack of confidence in the future market, and the continuous shrinking of export orders, all of which have increased the downward pressure
on silicone oil.

In short, the downstream demand for silicones continues to be weak, and market concerns are increasingly spreading, which is transmitted to the raw silicone DMC market, which will weaken its upward momentum
.