The silicone oil market has been experiencing continuous fluctuations, and its price trend has been on the nerves of many industries
Hits: 583
img
The silicone oil market has been experiencing continuous fluctuations, and its price trend has been on the nerves of many industries
Recently, the silicone oil market has shown a continuous volatile trend. Its price fluctuations have drawn widespread attention and had a profound impact on many related industries.
From the supply side, although the order-taking situation of most individual factories has improved after several rounds of decline, it still fails to meet expectations and they are under considerable pressure to continue taking orders. Under the double squeeze of costs and market demand, although individual factories have the intention to stabilize and ostensibly maintain stable quotations, some enterprises still have the phenomenon of negotiating concessions in order to close deals. This situation of each going its own way has led downstream enterprises to lack confidence in the market's oversold rebound and be rather cautious about stocking up in large quantities. In addition, the negative impact of the market continues to deepen, and it is difficult to see obvious positive feedback in the short term. Midstream and downstream enterprises generally hold a bearish sentiment towards the market in July, and their actions to build positions at the end of the month are very limited. In such a market environment, the situation of strong supply and weak demand is unlikely to change in the short term. Individual factories face considerable resistance to achieving a price rebound. It is expected that the subsequent trend will remain stable with some areas following up. As of June 25th, the DMC quotation remained stable at 10,300-10,800 yuan per ton.
Looking at the 107 glue and silicone oil markets, as the price of DMC has stopped falling and stabilized, the wait-and-see attitude of downstream enterprises has become increasingly intense. 107 glue and silicone oil enterprises continue to offer discounts through volume-based negotiations to boost sales. This week, the quotation for 107 glue is between 11,500 and 12,000 yuan per ton, and the quotation for silicone oil is between 13,200 and 13,800 yuan per ton. It is worth noting that recently, the price difference between 107 glue and DMC, as well as hydrolyzed materials, has reached over 1,000 yuan. This has led silicone glue enterprises to develop a resistance to the high-priced 107 glue. Most enterprises choose to purchase DMC and hydrolyzed materials to produce 107 glue on their own, resulting in poor order acceptance for 107 glue in most single factories. In some local areas, there is even considerable room for negotiation with core major players. Meanwhile, the off-season of the market has arrived. The shipment of silicone sealant enterprises is already not smooth, and the purchasing demand is even more limited. Under such circumstances, the risk of continuous inventory accumulation of 107 sealant has increased. Compared with the DMC price, 107 glue still has a price adjustment space of 300 to 500 yuan per ton, and the atmosphere of covert decline and bidding is strong.
In terms of silicone oil, major silicone oil producers have followed the market trend one after another, and the price decline is basically in line with that of DMC. The high-priced inventory from the early stage has not been fully digested, which has caused severe damage to the profits of silicone oil enterprises in the near future and the negotiation space is gradually narrowing. Foreign brands of silicone oil are also facing difficulties. Although they entered a new round of inventory preparation cycle at the end of the month, due to the weak demand both at home and abroad, the market is unable to form a demand resonance, and the product sales are poor. In addition, foreign silicone oil agents are under considerable financial pressure and can only gradually offer discounts to cash out and sell their products. Currently, the agents' quotations are between 16,000 and 18,000 yuan per ton, and they are continuously operating under pressure. The market for cracking feedstock silicone oil is also not optimistic. The price of new feedstock is ostensibly stable but actually falling. After the price drop, the order-taking situation of cracking feedstock enterprises has slightly improved, but the overall shipment situation has not been significantly improved. Currently, the quotation of cracking feedstock silicone oil remains at 11,500-11,800 yuan per ton, and most enterprises choose to reduce production to avoid business risks.
From the demand side, although the real estate sector saw a rapid rise in the Chinese stock market on June 25th, and the data released by the National Bureau of Statistics also showed positive changes in the supply structure of new houses, and about 30 cities have supported the withdrawal of housing provident funds to pay the down payment this year, these macro favorable factors have to some extent boosted market confidence. However, the recovery of terminal consumer market demand remains limited. In the fierce market competition, against the backdrop of "big fish eating small fish" bidding, the market share is still occupied by large enterprises. Most silicone sealant enterprises, in order to survive, are actively upgrading their products and technologies, expanding downstream and overseas sales channels. Currently, orders are still mainly for inventory clearance, and purchases are only maintained to meet essential needs.
Overall, there are many negative factors in the current silicone oil market. The downstream market is filled with a strong bearish sentiment, and the follow-up of new orders is weak. Most purchases are based on essential needs. It is expected that the markets for 107 glue and silicone oil will continue to operate weakly and steadily in the short term. In the event that demand recovery falls short of expectations, market competition will become increasingly fierce. Only by directly addressing customers' pain points, continuously improving product quality and service levels, and winning customers' favor can enterprises break through the predicament.