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SunSirs: March Silicone DMC "has fallen too much" Will it bottom out in April?

April 03 2020 10:49:05     SunSirs (Molly)

  1. Price trend

According to the monitoring data of the SunSirs, as of March 31, the average price of the silicone DMC market in several mainstream areas monitored by the data is around 15,200 yuan / ton, which is similar to the middle of the month (the average market price on March 15 is 18066 yuan / Compared with the previous month, the price dropped by about 2860 yuan / ton, which was close to 15.87%. Compared with the beginning of the month (the average market price on March 1 was 19,000 yuan / ton), the price dropped by about 3800 yuan / ton, a 20% decrease. 

  1. Market analysis

Product: In March, the domestic silicone DMC market declined severely. At the beginning of the month, factories were unable to withstand inventory pressures. At the same time that the operating rate was reduced, some factories with larger inventories took the lead in reducing the silicone DMC market offer, with a maximum reduction of 1,000. yuan /ton. Most factories actively respond to the situation of oversupply of the market by reducing the load and controlling the operating rate. This round of price adjustment has not caused a large-scale collective price reduction, but the overall market trading atmosphere is still affected. Downstream companies are more cautious in purchasing sentiment and have a wait-and-see attitude. Some dealers' prices have fallen by about 300-500 yuan/ton. After another week of turbulence and decline, the market's price stability mentality basically disintegrated. Various manufacturers have begun to show low-price bidding models. Most manufacturers have once again lowered their silicone DMC quotes. On March 16, the average DMC market reference price was 18,066 yuan. Near ton / ton, the individual low-end offer price is 17,000 yuan/ton. At the end of the month, due to the aggravation of international public events, the export of organic silicon DMC was also constrained, and the market offer was sharply lowered again. The reduction range was about 500-1000 yuan / ton. On March 23, the data monitoring DMC market reference average price has been It dropped to around 15,700 yuan/ton, and some low-end offers have fallen below 15,000 yuan/ton. However, the market's downward trend has not stopped. On the 30th, some offers in the silicone DMC market continued to loosen. The market reference average price has fallen to around 15,200 yuan/ton, and some low-end offers have reached around 14,500 yuan / ton. At present, the market price has fallen to the cost price, and this month's sharp decline has led to the absorption and alleviation of the stocks of the single plant, and the market will gradually stop falling and stabilize.

Industrial chain: upstream metal silicon market: domestically, the market inventory is low, and the silicon plants in Xinjiang area have reduced production in February-March, starting at a low level, and the monthly output has slightly decreased; the operating rates in Yunnan and Sichuan are not high, although The number of furnaces increased slightly month-on-month, but concentrated in late March; some small-scale manufacturers in Fujian and Hunan resumed production, and the capacity was not large. Overall, the domestic operating rate in March was about 30%, a decrease of 0.3 percentage points from the previous month. It is reported that the current social inventory has decreased by nearly 30% year-on-year.

3. Market Forecast

SunSirs analysts believe that the market for organic silicon DMC has fallen to the bottom. After destocking, the manufacturers' price increase is overwhelming. It is expected that the organic silicon DMC market will rise steadily in April.

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