DMC, raw rubber, and compounded rubber prices have rebounded from their lows!
News from the Organosilicon Mall - May 7th: After the holiday, the price trend of organosilicon is unpredictable. Most enterprises are in a wait-and-see state, and the market has started steadily. In terms of the DMC market, the inventory reduction in the pre-holiday stage was acceptable, supporting some monomer plants' prices to bottom out and rebound. However, due to the significant decline before the holiday, downstream enterprises actively stocked up. After the holiday, their willingness to replenish inventory is not high, and they are resistant to the upstream's local 试探. In the short term, the market transaction situation is dull.
Overall, due to the untimely follow-up of terminal demand, upstream and downstream enterprises have not been able to clear their production capacity as soon as possible. Under the pressure of supply, the price of the organosilicon market fluctuates, generally showing a bottoming-out and volatile trend. In short, the changes in the supply and demand side in the stage are still important factors disturbing the price change of DMC. It is expected that upstream and downstream enterprises will mainly focus on digesting previous orders this week, and the price will mainly remain stable.
Raw rubber market: Entering a new month, with the raw material DMC stopping its decline and stabilizing, and some local areas seeing an upward trend, the market prices of raw rubber enterprises have also been adjusted upward. However, downstream compounded rubber enterprises do not buy into the upward trend. Instead, under the pressure of costs and profits, they keep pressing prices when inquiring about raw rubber. Currently, the mainstream quotation of raw rubber remains at 12,700-13,200 yuan/ton, and the explicit price remains stable. In addition, from the perspective of the supply and demand pattern, currently, each monomer plant mainly focuses on delivering pre-sold raw rubber orders, and the short-term inventory pressure has been greatly relieved. However, compounded rubber enterprises and traders have stocked up before the holiday, and the market supply still appears sufficient. Transactions mainly occur at low prices. It is expected that the market will remain stable in the short term, and subsequent price adjustment operations will still depend on the operating rate of raw rubber and the order-taking situation of compounded rubber.
Compounded rubber market: After the holiday, compounded rubber enterprises maintain a wait-and-see attitude, and the mainstream quotation continues to be 12,300-13,000 yuan/ton. From the supply side, under the long-term reshuffle pattern, although the output of many small and medium-sized compounded rubber enterprises has been reduced, upstream enterprises are increasing the output of silicone rubber to digest their own raw materials. The supply scale is still large, and the competitive environment remains intense. After a round of stocking before the holiday, the focus after the holiday is mainly on taking orders.
In terms of demand, under the influence of tariffs, terminal demand is suppressed. Silicone product manufacturers have weak risk resistance, and there is great pressure on the payment collection of compounded rubber. Therefore, in order to obtain more cash orders, many enterprises will take risks and offer concessions in advance to take orders. However, recently, the raw rubber has bottomed out and rebounded, which has also alleviated the price competition of compounded rubber to some extent.
Insiders generally believe that in this year's market situation, conservative operation is the best choice. It is necessary to be short-term, efficient, and downplay the speculative operation mode, develop more downstream users, and tap into customized and segmented market demands.
Silicone product aspect: After the holiday, there are no obvious positive factors in the organosilicon market, and the weak demand situation is difficult to reverse in the short term. Silicone product enterprises lack confidence in the future market and are not enthusiastic about stocking up on raw materials. They focus more on how to expand sales channels. This can be seen from the increasing number of silicone product factories engaging in video marketing this year. In the past, processing orders distributed by large factories have not only been reduced, but also in the homogeneous competition, low price is the king. Therefore, developing first-hand orders has become particularly important. However, there are more competitors and less business opportunities, and the cost of traffic is getting higher and higher. The input and output of marketing are mostly not proportional. However, in the long run, it is precisely through the continuous exposure of organosilicon enterprises that they can achieve cross-border communication and continuously expand the terminal application scope.
Overall, since May is a traditional off-season, the rebound of some local monomer plants is unlikely to change the bearish sentiment in the market. Currently, downstream enterprises have a weak expectation for the future market and are indifferent to chasing rising prices. In the short term, it is still necessary to closely monitor the downstream and terminal demand situations. (The above information is only for communication and sharing and is not a basis for transactions. It is originally edited by the Organosilicon Mall. Please indicate the source when reprinting.)