As mid-December approaches, the organic silicone market is expected to continue its upward trend driven by the continuous optimization of the supply-demand structure.
Looking back at the market performance last week, with the accelerated coordinated recovery of upstream and downstream enterprises, the activity of market transactions has improved significantly. The market has fully kicked off the second round of price increases, with the prices of DMC, raw rubber, 107 rubber, silicone oil and other products all rising by over 500 yuan. Driven by this upward trend, midstream and downstream enterprises have carried out a certain amount of stock replenishment. However, they remain relatively cautious about the current high prices and replenish stocks in batches according to demand. Their interaction with monomer manufacturers has gradually shifted from a game-like state to coordination.
In addition, the 30% emission reduction target is being implemented in staggered peaks, and the market's supply-demand structure has shown signs of improvement, with the fundamental support gradually strengthening. Meanwhile, some midstream and downstream enterprises have maintained low inventory levels due to their continued bearish outlook in the early stage, leading to strong demand for stock replenishment at present. Under this favorable situation, new high-price orders in the market are still being gradually released. Combined with the early pre-sold orders of monomer manufacturers, upstream enterprises have sufficient confidence in maintaining high prices.
In the short term, as the upward price trend is gradually transmitted to the end market and the industry's self-disciplined emission reduction efforts continue to be strengthened, if the conversion of new high-price orders in the midstream and downstream sectors remains sound, the second round of price increases will be quickly accepted by the market. Therefore, under the pressure of another round of cost increases, although silicone sealant enterprises issued price increase notices of 10%-20% in November, since the market rebound in November, the prices of raw materials such as DMC, 107 rubber and silicone oil have surged by 2,500-3,000 yuan. Given the current increase in raw material prices, it is expected that a new round of price increase notices for silicone sealant will be released in December.