Soaring​ 3700 CNY/ton! Silicone explosion! Leading companies are skyrocketing!

Recently, the organic silicon sector opened slightly higher and unilaterally pulled upwards. The intraday rose more than 4% and then peaked and adjusted at a high level. In the afternoon, the sector maintained a high level for consolidation.

As of the close, organic silicon rose 3.76%, of which Sanfu, Hesheng Silicon, Chenguang New Materials rose by the daily limit, Runhe Materials rose 9.42%, Jin Yinhe rose 5.06%, Hongbai New Materials, Chenhua shares, and Dongyue Silicon rose more than 4% .

According to data, the average price of organic silicon in the third week of June increased by 2,300 CNY/ton, and the quotations of some manufacturers rose by 3700/ton from June 8 to June 28, an increase of nearly 14%.

Some analysts said that the domestic market is still at a high level, and the shortage of supply has not yet eased. Downstream DMC demand has increased significantly. The industry's confidence has risen. Many manufacturers have stopped selling and are reluctant to sell. It is expected that the price of silicone will continue to rise in the short term. According to Organosilicon.com, the production capacity of Hesheng Silicon Industry’s Shihezi plant is currently shut down for maintenance and is expected to gradually recover after mid-July.

As of June 28, the domestic mainstream DMC manufacturers' quotations are still at a high level, above 30,000 CNY/ton. With the strong support of DMC costs, the prices of intermediates and downstream products are rising. Due to the lack of raw material inventory of manufacturers in the early stage, downstream products are available. Still tight.

In the long run, silicone has a wide range of application scenarios, with more than 7,000 types of terminal segmentation products. It is expected that in the next 5 years, the downstream market of organic silicon will usher in a major outbreak in many fields. By 2025, the relevant market will rise from the current 50 billion yuan to 94.5 billion yuan, and the prospects are very promising.

my country has become a major producer and consumer of organic silicon, and the advantages of domestic organic silicon products have become increasingly prominent. According to data from the National Silicon Industry Green Development Strategic Alliance, my country has changed from a net importer of organic silicon to a net exporter since 2014. In 2020, the cumulative export of organic silicon was 243,000 tons, an increase of 8.5% over the previous year; the import was 152,000 tons. An increase of 2.9% over the previous year.

Industry organizations predict that silicone market prices are expected to be high in the second half of 2021, and that domestic new production capacity will gradually invest another 400,000 tons of production capacity in the second half of the year, but the actual output increase is expected to be around 2022.

On the whole, the output growth in 2021 is mainly due to the 400,000 tons of new production capacity of Hesheng Silicon Industry. This capacity has been released in the first half of this year, but the supply situation is still relatively tight.

China Post Securities believes that due to the vacuum period of new production capacity and the low inventory of the entire industry, the price of organic silicon products is expected to continue to rise in the future. The sharp rebound in organic silicon prices has increased the performance of related companies. As prices continue to rise, industry leaders are expected to benefit from the focus.