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According to the commodity market analysis system of the business community, since the beginning of April, the domestic organic silicon DMC market has continued to decline weakly, and the center of gravity has continued to fall. On April 1, the price of organic silicon DMC was 15,260 yuan/ton, and on May 7, the price of organic silicon DMC was 13,500 yuan/ton, and the price of organic silicon DMC fell by 11.53% in the cycle.
According to the year-to-date price chart of organic silicon DMC of the business community, it can be seen that since the beginning of the year, the domestic organic silicon DMC market has fluctuated and risen, and by mid to late March, the high level of organic silicon DMC market has fallen, and the market price has continued to move closer to the low level. As of May 7, the price of silicone DMC has been at the lowest level in 2024, which has already engulfed the previous market rally.
As can be seen from the annual comparison chart of silicone DMC prices, the current market price of silicone DMC has fallen to a low level in the past four years.
Factors influencing the decline of the organic silicon DMC market:
In the first half of April, the demand for organic silicon DMC was light, downstream users mainly digested the early raw materials, the new orders in the market were weak, the market inquiry atmosphere was insufficient, and it was difficult for the demand side to give effective support to organic silicon DMC. In the second half of the year, although some silicone DMC devices were shut down for maintenance, and the overall operating rate of silicone DMC was reduced, the overall supply of silicone DMC was still loose due to the slow transmission of demand, and the overall supply pressure of the market still existed.
Can the silicone DMC market usher in a turnaround in the future?
After Labor Day, on the first day of construction, Shandong Dachang organic silicon DMC held a stable pre-holiday quotation, the price reference was about 13,200 yuan/ton, and other factories also followed the footsteps of large factories to stabilize the pre-holiday quotation, on May 7, the market price of organic silicon DMC was 13,200-14,000 yuan/ton.
In terms of start-up: although the market tends to reduce the operating rate in May, some silicone DMC shutdown and maintenance devices in April will be resumed and restarted in May, and some new production capacity will be put into production, and the operating rate of silicone DMC devices in May will be adjusted less than expected, and the operating rate is likely to "rise instead of falling". The increase in operating rates will also increase the supply pressure of silicone DMC plants.
Supply: Affected by the start of construction, entering May, the overall supply pressure of silicone DMC will still exist, but although the supply pressure is not reduced, the current market price of silicone DMC has fallen to a low point, and the low price in some areas is close to 13,000 yuan/ton, therefore, the factory continues to adjust the price willingness to adjust downward, and it is expected that the silicone DMC market will pay more attention to the control of the supply side inventory and the regulation and control of the production and burden reduction of products in May.
On the demand side: at the end of April, there was a wave of small-scale bottom-buying stocking in the downstream of organic silicon DMC, but the overall wait-and-see sentiment in the downstream still existed, and the overall pre-holiday stocking was less than expected. After entering May, the overall pre-received orders of the organic silicon DMC factory are limited, and due to the possible growth of the supply side, the organic silicon DMC industry is worried that the contradiction between supply and demand in the market will continue to intensify, so the downstream sentiment of organic silicon DMC is not good. At present, there is no obvious boost in the downstream demand for silicone DMC.
Technically: market prices are at the lowest level of the year, and there is still a narrow downside risk in May
According to the commodity market analysis system of the business community, the current market price of organic silicon DMC is at a one-year low, a two-year low, and a three-year low.
Since 2024/3/24, the 7-day moving average of silicone DMCs has crossed the 30-day moving average to start a downward trend, and the current two moving averages continue to move downward in the same direction. It is estimated that there is a small probability of a change in the operating situation (i.e., the 7-day moving average crosses the 30-day moving average) in the next 7 days.
To sum up: the data engineer of the business community believes that in May, the overall supply and demand contradiction of the organic silicon DMC market still exists, the pressure on the supply side is not reduced, the demand side is unknown, and the regulation between supply and demand remains to be seen. Therefore, there is still a downside risk in the silicone DMC market in May, but in the face of the current almost bottoming price, the probability of a sharp decline in silicone DMC is small, and the market center of gravity is likely to be adjusted downward in a narrow range, and the adjustment range is estimated to be about 100-200 yuan/ton.