In April, the silicone market is expected to continue the upward trend of shock, but the increase may be narrowed by the impact of the supply and demand game. The following three dimensions are analyzed from the fundamentals of supply and demand, cost support and policy environment:
Supply side: production reduction synergies continue
The industry's self-disciplined production reduction measures are still continuing, and enterprises maintain market balance by limiting production and supporting prices. Despite the gradual release of new capacity, short-term supply pressure is limited. The inventory level of enterprises is at a low level, and some manufacturers have adopted the strategy of holding back sales, further supporting the price center.
Demand side: structural growth differentiation
The demand for traditional construction is weak, but the demand for silicone in emerging industries such as new energy vehicles and photovoltaics continues to be released. For example, the demand for photovoltaic module packaging adhesives and new energy vehicle sealing materials has maintained double-digit growth. However, the order differentiation of downstream enterprises is obvious, the order of the head enterprise is sufficient, the purchase of small and medium-sized enterprises is cautious, and the overall demand elasticity is limited.
Cost side: raw material price volatility intensifies
Metal silicon and other raw material prices remain high, the cost side support is strong. If raw material prices continue to rise, silicone production costs will further rise, forcing companies to raise prices. However, it is necessary to be alert to the risk of profit squeeze caused by poor cost transmission.
Policy and external factors
Environmental protection policies have become stricter to form constraints on small and medium-sized production capacity, and the trend of increasing industry concentration remains unchanged. In the international market, the economic recovery in Europe and the United States is expected to strengthen, and export orders are picking up, but the risk of trade friction still exists.
Synthetic judgment
In April, the silicone market will show a "cost support + demand differentiation" pattern, and the price focus will move up slightly, but the increase is difficult to advance. It is recommended to focus on the enterprise operating rate, inventory changes and downstream order continuity, and be alert to the risk of pullback caused by less than expected demand.
