April 12 news: a number of famous insiders said to the author: as long as the epidemic does not end and the demand of silicone industry chain rebounds hopelessly, then the price of silicone will always hover at a low level. The only way to change the market is to reduce production. According to a person familiar with East China, the top 10 monomer manufacturers plan to launch a concerted action to reduce production in late April, with an overall reduction of about 20%. (Note: the OPEC + conference, which attracted worldwide attention, finally came to an end and reached a 10 million barrels / day production reduction agreement, which is unprecedented in scale. The G20 energy ministers' meeting also confirmed the agreement.)
The person in charge of a downstream listed enterprise thinks that before the market is happy, it falls into a deep thought: Although the scale of production reduction is good, it is still a large part less than the increasing traditional demand reduction. Can the reduction of production really support the price of silicone? Before the outbreak, the supply and demand were roughly balanced, but the wind direction was changing. At present, it is generally expected that the downstream market demand will be reduced by 25-35% after the global outbreak.
According to president Fang, those high-cost monomer enterprises may take the initiative to reduce production naturally. As time goes on, the silicone market will automatically move towards the balance point of supply and demand. The three downstream famous big investors are not optimistic about the future price of silicone. They believe that although the current market's optimism about the production reduction in April can support the market price in the next half month, this trend will not last for a long time. The target price of DMC, raw rubber, 107 rubber, silicone oil and other products is about the lowest level in 2015. The most important thing is that the shrinking demand is the basis of further rational silicone prices in the future.
(Note: it only represents the opinions of the insiders, not the basis of market operation)
In March, industrial producer price index (PPI) fell 0.7% from the perspective of the month on month index, and the decline was 0.3 percentage points higher than that in February.
In terms of specific industries, the 38 PPI industry wide index "rose 11 times, fell 24 times and leveled 3 times" in March, with the industry's growth rate of 28.9%, 13.1 percentage points higher than that in February. There are two characteristics: first, the decline of petrochemical related industries is large. Experts believe that novel coronavirus pneumonia and other factors, and the market demand for domestic petrochemical related products declined, and crude oil and refined oil prices fell sharply. In March, the prices of oil and natural gas exploitation, oil processing, coking and nuclear fuel processing industries fell 5.4% and 8.9% month on month, respectively, driving the overall decline of petrochemical related industries by 2.9%.
Second, the price of metal related industries continued to decline. According to expert analysis, in March, most of the downstream engineering construction of steel enterprises has not been resumed, the market demand has been reduced, the prices of non-ferrous metal mining and beneficiation industry, non-ferrous metal smelting and rolling processing industry, and ferrous metal smelting and rolling processing industry have continued to decline.
In addition, in terms of the year-on-year index, PPI decreased by 0.4%, with a difference of 0.6 percentage points compared with the increase of 0.2% in February. The industries with large increase include: the price of agricultural and sideline food processing and food manufacturing industry increased by 3.5%, the price of textile, clothing, fur and footwear related industries increased by 3.5%, the price of automobile manufacturing industry increased by 2.4%, and the price of general and special equipment manufacturing increased by 1.8%. The price of petrochemical related industries decreased by 3.0%, and the price of electrical machinery and equipment manufacturing industry decreased by 2.7%.