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Global Organosilicon Network, May 13: A significant turnaround has emerged in the global trade landscape. According to Xinhua News Agency, high-level Sino-US economic and trade talks were held in Geneva, Switzerland, from May 10 to 11, with a joint statement issued on May 12. Although recent fluctuations in global supply chains have once again highlighted their deep interdependence and fragility, the latest progress in the talks demonstrates that the cost-effectiveness and full industrial chain advantages of "Made in China" remain irreplaceable. The continued demand for "Made in China" among American consumers further underscores the powerful force of market dynamics. As a result, some organosilicon monomer manufacturers reported closed quotes last night, indicating a boost in market confidence.
As of May 12, the domestic silicone gum market continues to operate weakly with stable prices, with mainstream quotes ranging from 12,700 to 13,500 RMB/ton, and actual transaction prices between 12,500 and 13,300 RMB/ton. Low-priced inventory accounts for a higher proportion. Leading manufacturers in Xinjiang report sufficient orders, benefiting from the rapid development of emerging sectors such as new energy (photovoltaic, new energy vehicles), 5G communication, and ultra-high voltage. The organosilicon industry is expected to maintain high growth in demand by 2025. Particularly, emerging fields are gradually replacing traditional petroleum-based materials, such as room-temperature vulcanizing (RTV) rubber and high-temperature vulcanizing (HTV) rubber driven by new energy demands, and liquid silicone rubber and silicone resins expanding rapidly due to new application scenarios (e.g., AI terminals, flexible electronics), leading to surging demand.
Affected by falling raw material prices and industry-wide losses, some monomer production facilities have significantly reduced output, and silicone gum manufacturers have adjusted their production loads accordingly, with notable reductions in local production lines. It is reported that a major facility may undergo maintenance later this month, raising expectations of supply contraction. However, current inventory pressures persist, and the short-term supply surplus situation is unlikely to change.
Compounding rubber companies are experiencing ongoing losses, with strong resistance to high-priced silicone gum, leading to a continuous downward shift in transaction prices. Although some silicone gum manufacturers have attempted to hold prices, weak terminal consumption has intensified negative feedback. Compounding rubber companies are facing extended payment cycles and high finished goods inventory, resulting in silicone gum purchases only meeting necessary demand. Most companies adopt a "buy on dips" mentality, further suppressing price recovery.
In the absence of significant improvement in terminal demand, profit compression across the industrial chain is expected to persist. The short-term silicone gum market is likely to maintain a stable yet weak trend, with some manufacturers potentially continuing to offer discounts to alleviate inventory pressures. Market participants should closely monitor upstream maintenance dynamics and downstream stocking sentiment.
Industry analysts note: "The positive progress of the Sino-US economic and trade talks has injected confidence into global supply chains, particularly the cost-effectiveness and full industrial chain advantages of Made in China, which remain irreplaceable. However, the supply-demand imbalance in the organosilicon industry will persist in the short term, and market participants should closely monitor changes in terminal demand and upstream supply dynamics."
The joint statement from the Sino-US high-level economic and trade talks has brought a significant turnaround to the global trade landscape, boosting market confidence. While the organosilicon industry faces ongoing supply-demand imbalances and inventory pressures, the long-term demand outlook remains optimistic, driven by the rapid development of new energy, 5G communication, and other emerging sectors. Market participants should closely monitor supply-demand dynamics and seize market opportunities.
