Fire Incident Overview - A fire incident occurred at the synthetic phase B facility of Dongyue Silicon Materials Co., Ltd. The company activated its emergency response plan and implemented a one-button shutdown system to evacuate personnel and assist local firefighting efforts. The fire has been controlled and extinguished without any casualties or secondary disasters [1][2]. Impact on Company Operations - Preliminary assessments indicate that the fire caused varying degrees of damage to the facility, equipment, and inventory, with specific loss amounts still under evaluation. The company has insurance coverage for the damaged assets and has initiated the claims process with the insurance company [1]. - The timeline for resuming production and operations remains uncertain, and it is initially estimated that the incident will have a certain impact on the company's operating performance for the year 2025. The company aims to ensure customer order fulfillment and will take necessary measures to minimize losses [1]. Future Measures and Commitments - The company will learn from this fire incident and enhance management practices to prevent similar occurrences in the future. It will closely monitor the progress of the accident investigation and any direct economic losses, committing to timely information disclosure if thresholds are met [2].

金十数据7月21日讯，东岳硅材公告，7月20日13:50左右，山东东岳有机硅材料股份有限公司的合成三 期B床发生一起火灾事故。经初步核查，本次火灾事故造成合成三期厂房、设备及存货不同程度受损， 具体损失金额尚在评估中。公司已对受损资产投保财产险，目前已完成保险公司报案程序，相关核损理 赔工作正在推进。 由于恢复生产经营时间尚不确定，初步预计本次事故将对公司2025年度经营业绩产 生一定的影响。公司将最大限度保障客户订单交付，并采取一切必要措施降低损失。 东岳硅材：公司发生火灾事故 预计将对公司2025年度业绩产生一定的影响 ...

Core Viewpoint - The third China International Supply Chain Promotion Expo showcased advancements in the automotive sector, with Wacker Chemie presenting over 20 products focused on enhancing safety and performance in electric vehicles [1][3]. Group 1: Market Demand and Product Innovation - Wacker Chemie has been a long-standing player in the automotive industry, leveraging its expertise in silicone materials to address the growing safety and thermal management needs of electric vehicles [3][4]. - The company introduced a new fire-resistant insulation material, SILMIX R CG 65871 ORG CN, designed to protect battery packs from high temperatures, enhancing safety during thermal runaway events [4]. - Wacker also launched solid silicone materials for charging systems, aimed at improving thermal management and preventing overheating during fast charging [4]. Group 2: Strategic Positioning in China - Wacker has invested €1.16 billion in China over 30 years, establishing a comprehensive service network that includes three production bases and two technology centers [5]. - The company is responsive to the increasing demand for automotive-grade power modules, introducing thermal adhesive products that can withstand extreme temperature fluctuations [5]. - Wacker's commitment to local market needs is evident in its development of high-performance thermal grease for automotive applications, showcasing its adaptability to industry trends [5]. Group 3: Broader Industry Trends and Opportunities - The shift towards intelligent automotive solutions is driving demand for advanced materials across various sectors, including high-performance computing and data centers [6]. - Wacker's innovative liquid cooling silicone oils are designed to meet the cooling needs of data centers, enhancing energy efficiency and safety [6]. - The company is exploring new opportunities in emerging industries such as low-altitude economy and humanoid robotics, indicating a proactive approach to market evolution [7]. Group 4: Global and Local Integration - Wacker emphasizes a global perspective in its operations, ensuring that products developed in China are also marketed internationally, and vice versa [7]. - The recent expansion of Wacker's Zhangjiagang facility represents a significant investment aimed at meeting the growing demand for specialty materials in China [7].

Core Insights - The third China International Supply Chain Promotion Expo has commenced, injecting new momentum into global industrial chain innovation and cooperation [1] - Wacker Chemie, a leading global silicone producer, made its debut at the expo, showcasing over 20 innovative products in the automotive and electronics sectors, along with 4 new products, reflecting the confidence of foreign enterprises in the Chinese market [1] Company Highlights - Wacker exhibited core products such as fire-resistant materials for electric vehicle busbars and thermal conductive materials for automotive chips, precisely addressing key demands in China's new energy vehicle supply chain [2] - The silicone rubber material developed for battery pack safety can rapidly ceramicize at temperatures up to 1000 degrees Celsius, providing a robust safety barrier for the "three electric" systems [2] - Automotive-grade thermal conductive materials can withstand temperature variations from -40 to 180 degrees Celsius, supporting the upgrade of intelligent driving technologies [2] Industry Context - Wacker's innovations represent the technological achievements of its deep engagement in the Chinese market and exemplify the collaborative innovation between domestic and foreign industries [2] - The Chinese new energy vehicle industry chain is recognized as complete and expansive, serving as a significant source of global industrial innovation [2] - The expo is becoming an important platform for enterprises from various countries to share development opportunities in China, highlighting the strong appeal of the Chinese market and the resilience of its supply chain [2]

Core Viewpoint - The company announced the design capacity of its "Annual Production of 23,000 Tons of Special Organic Silicon Materials Project," specifically for aerogels, is set at 2,000 tons per year, and it has entered formal production phase [1] Group 1: Project Developments - The wholly-owned subsidiary Anhui Chenguang New Materials Co., Ltd. is in the comprehensive construction phase of its "Annual Production of 300,000 Tons of Functional Silanes Project" [1] - The wholly-owned subsidiary Ningxia Chenguang New Materials Co., Ltd. has reached trial production conditions for the first phase of its "Annual Production of 300,000 Tons of Silicon-based and Aerogel New Materials Project," which is expected to continue with the second phase construction and third phase planning in 2025 [1]

Market Performance - The Shanghai Composite Index closed at 3516.83 points, up 0.37%, with a trading volume of approximately 609.8 billion yuan [2] - The Shenzhen Component Index closed at 10873.62 points, up 1.43%, with a trading volume of approximately 929.6 billion yuan [2] - The ChiNext Index closed at 2269.33 points, up 1.76%, with a trading volume of approximately 443.1 billion yuan [2] Sector Performance - The components sector saw significant gains, driven by stocks such as Mankun Technology and Dongshan Precision, which hit the daily limit [1] - Other sectors that experienced notable increases include aviation, military equipment restructuring, communication devices, generic drugs, innovative drugs, CRO concepts, millimeter-wave radar, and 6G concepts [1] - Conversely, sectors such as precious metals, electricity, and banking experienced slight adjustments, but overall declines were minimal [1] Institutional Insights - Jifeng Investment Advisory noted that the market is expected to continue rising due to favorable domestic monetary policy and suggested investors buy on dips, focusing on high-growth areas like semiconductors and AI [3] - Guotai Junan highlighted that leading internet companies' capital expenditures are expected to remain high, potentially generating at least 7GW of new IT power demand, which presents growth opportunities for related enterprises [3] - Tianfeng Securities pointed out that the exit of overseas silicone production capacity could improve the supply-demand dynamics in the industry, particularly benefiting China's export share in the European market [3] Regulatory Developments - China has released the world's first international standard for silicon-based anode materials for lithium-ion batteries, which is expected to guide production and promote innovation across the industry [4] - The Henan provincial government has introduced policies to support mergers and acquisitions for listed companies, aiming to enhance the quality of listed firms and improve capital market services for the real economy [5]

Core Viewpoint - Dow Chemical announced the closure of three upstream assets in Europe to address structural challenges in the region, which is expected to significantly impact the supply-demand dynamics in the silicone industry [1][2]. Group 1: Company Actions - Dow will close an ethylene cracker in Germany, a chlor-alkali and vinyl plant in Germany, and a siloxane plant in the UK, with the shutdown process expected to start in mid-2026 and complete by the end of 2027, with final dismantling by 2029 [2]. - The closure of the UK plant, which has a capacity of 14.5 million tons, represents 30.5% of Europe's silicone capacity and 3.4% of global capacity [2][3]. Group 2: Industry Impact - The exit of overseas silicone capacity is anticipated to improve the supply-demand balance in the industry, as approximately 75% of DMC capacity is concentrated in China [2]. - From 2015 to 2024, about 290,000 tons of polysiloxane capacity is expected to exit the market, with overseas capacity projected to decrease to 915,000 tons by 2026 [3]. - China's silicone demand is expected to grow at a CAGR of 15.5% from 2021 to 2024, with a potential price increase in 2025 due to improved supply-demand dynamics [3]. Group 3: Export Opportunities - The closure of Dow's UK plant is likely to enhance China's share of silicone exports to Europe, with an estimated annual DMC production of 87,000 tons, which would account for 88% of China's silicone exports to Europe in 2024 [4]. - As of 2024, China's silicone exports to Europe are projected to be around 98,000 tons, representing 18% of total domestic exports [4].

Report Industry Investment Rating No relevant content provided. Core Viewpoints - China's economic recovery in the first half of the year was supported by fiscal stimulus and "front - loading exports", but the foundation for economic stabilization needs further consolidation. The "anti - involution" policy expectations in multiple industries are rising, and attention should be paid to the possible further strengthening of pro - growth policies at the Politburo meeting in July [1]. - After the passage of the "Big Beautiful" Act, Trump has shifted his focus to external pressure to accelerate tariff negotiations, and the impact of tariff events on demand expectations needs to be monitored [1]. - The current commodity fundamentals are still weak, and a cautious attitude should be maintained towards the implementation of policy expectations, while the volatility of commodity prices may remain high [2]. Summary by Related Catalogs Market Analysis - **Domestic Economy**: In May, domestic investment data weakened, especially in the real estate sector, which may drag down fiscal revenue and the entire real - estate chain. Exports were also under pressure. Only consumption showed resilience. China's GDP in the first half of the year increased by 5.3% year - on - year, higher than the annual target of 5%. In June, the manufacturing PMI rebounded, and the added value of industrial enterprises above designated size increased by 6.8% year - on - year, with rapid growth in the production of new - energy vehicles and industrial robots. However, the year - on - year growth rate of social retail sales slowed to 4.8% in June, and infrastructure and manufacturing investment declined [1]. - **Policy Expectations**: Since July, relevant departments have emphasized the governance of low - price and disorderly competition among enterprises, and the "anti - involution" policy expectations in industries such as photovoltaic, lithium battery, and automobile have increased [1]. - **US Situation**: Trump signed the "Big Beautiful" tax and spending bill, which may increase the US government debt by $3.4 trillion in the next decade. The US has entered a stage of "easy to loosen, difficult to tighten" policies. The US 6 - month PPI annual rate was 2.3%, the lowest since September 2024, and the month - on - month rate was flat. Trump has accelerated tariff negotiations, and attention should be paid to the impact of tariffs on demand expectations [1]. Commodity Market - **Domestic Supply - Sensitive Sectors**: The black and new - energy metal sectors are the most sensitive to domestic supply - side changes. The black sector is still dragged down by downstream demand expectations, and the supply constraints in the non - ferrous sector have not been alleviated [2]. - **Overseas Inflation - Benefiting Sectors**: The energy and non - ferrous sectors benefit significantly from overseas inflation expectations. In the short term, the geopolitical premium in the energy sector has ended, and the supply is expected to be relatively loose in the medium term. OPEC+ will increase production by 548,000 barrels per day in August, higher than expected [2]. - **Agricultural Products**: There are no short - term weather disturbances in agricultural products, and the fluctuation range is relatively limited [2]. Strategy - For commodities and stock index futures, it is recommended to allocate long positions in industrial products on dips [3]. To - Do News - **Stock Market**: On July 16, the three major A - share indices declined slightly, with the ChiNext Index rising and then falling back. Pharmaceutical and robot concept stocks were strong, while the silicone sector adjusted [1][4]. - **Interest Rate**: The President of the Dallas Fed, Logan, supports maintaining the interest rate unchanged to cool inflation and believes that if inflation and the labor market weaken, interest rate cuts may be considered [1][4]. - **Tariff and Trade**: Trump is accelerating tariff negotiations, with tariffs on some countries already determined or to be announced. The US has also launched investigations into the trade practices of some countries, and the impact of these tariff events on demand expectations needs to be monitored [1][5]. - **Energy**: The US API crude oil inventory increased last week, and the US has threatened to withdraw from the International Energy Agency due to its support for green energy [2][5].

Group 1: Economic Overview - The GDP growth rate for the first half of the year is 5.3%, driven by structural optimization in industries, with high-tech manufacturing value added increasing by 9.5% and equipment manufacturing by 10.2% [1] - Domestic demand is contributing more significantly to economic growth, with final consumption expenditure's contribution rising by 0.6 percentage points to 52.3% in Q2 [1] - Infrastructure investment from January to June increased by 4.6% year-on-year, while manufacturing investment rose by 7.5%, indicating effective fiscal policy support [1] Group 2: Chemical Industry Insights - Dow's closure of its UK organic silicon plant is expected to reduce overseas polysiloxane capacity from 106 million tons in 2024 to 91.5 million tons by 2026 [3][34] - The closure of Dow's UK plant, which accounts for 30% of Europe's organic silicon capacity, is likely to enhance China's export share to Europe, with an estimated 8.7 million tons of DMC production potentially representing 88% of China's exports to Europe in 2024 [3][35] - China's organic silicon demand is projected to grow at a CAGR of 15.5% from 2021 to 2024, with prices expected to rise as supply-demand dynamics improve [34] Group 3: Construction and Infrastructure - Cement demand is stabilizing, with production in the first half of 2025 at 815 million tons, down 4.3% year-on-year, while prices have decreased by 43 yuan per ton compared to the previous year [4] - The issuance of long-term special government bonds is anticipated to support infrastructure investment, which is expected to remain high in the second half of the year [6] Group 4: Medical Device Market - The total bid amount for medical devices in June 2025 reached 12.618 billion yuan, a 30% year-on-year increase, indicating a recovery in the bidding market [18][36] - Domestic brands like Mindray and United Imaging are seeing significant growth in bid amounts, with Mindray's total for June reaching 623 million yuan, up 15% year-on-year [18][36] Group 5: E-commerce and AI Applications - The company reported a 20% increase in net profit for the first half of 2025, driven by a robust platform growth and the introduction of AI applications for order acquisition [19][22] - The e-commerce segment has become a new growth engine, with transaction volumes increasing significantly, and the company is also entering the robotics sector through strategic partnerships [22][25] Group 6: Investment Recommendations - Recommended stocks include Xin'an Chemical, with a focus on companies benefiting from the closure of Dow's UK plant and the expected increase in China's export share [3][35] - The report suggests continued investment in high-growth sectors such as urban renewal, coal chemical, nuclear power, and steel structures, while also considering undervalued state-owned enterprises [6]

Summary of the Organic Silicon Industry Conference Call Industry Overview - The organic silicon industry experienced a demand growth rate of nearly 20% in the first half of 2025, primarily driven by increased demand for high-temperature adhesives in the electronics sector and a rise in export volumes to Europe. However, the growth rate is expected to slow down to 8%-10% in the second half of the year due to poor performance in the construction sector, although significant demand growth is noted in emerging fields such as new energy and new materials [1][8]. Key Points - **Current DMC Pricing and Cost Structure**: The current price of DMC is approximately 11,000 RMB per ton, with production costs ranging from 10,500 to 10,700 RMB per ton, indicating a narrow profit margin. The rise in industrial silicon prices is a major influencing factor, with some companies reducing costs by self-supplying industrial silicon and chloromethane [1][9]. - **Production Capacity and Utilization**: Domestic organic silicon production capacity accounts for about 70% of the global total, with current operating rates around 72%-73%. This is expected to increase to about 80% in the second half of the year due to easing supply-demand tensions and seasonal demand peaks in September and October [1][11][13]. - **Future Capacity Additions**: No new DMC production capacity is expected to come online in 2025. Planned capacity additions for 2026 are primarily concentrated in the Xinjiang Qiya Phase I project, with other projects facing uncertainties. Supply growth will mainly rely on existing companies increasing their operating rates [1][12]. - **Impact of Dow's Exit**: Dow's exit from the market is not expected to significantly impact global organic silicon supply, as domestic capacity can compensate for the reduction. This is anticipated to benefit domestic exports, with an expected increase in export volumes [1][6]. Market Dynamics - **Price Trends**: The organic silicon market has seen a downward price trend throughout the year, with prices hitting a historical low of 10,000 RMB per ton in mid-June. Following this, there has been a slight rebound in prices due to order fulfillment and inventory reduction [2][4]. - **Demand Forecast**: The second half of the year is expected to perform better than the first half, with a strong demand forecast during the "Golden September and Silver October" period. The impact of U.S. tariffs is anticipated to be less severe in the latter half of the year [5][8]. - **Downstream Product Applications**: High-temperature adhesives account for about 40% of downstream products, primarily used in construction and electronics. Room temperature adhesives make up 30%, while silicone oil accounts for 12%-15%, with applications in personal care and food processing [3][15]. Additional Insights - **Inventory Levels**: Current inventory levels are reported to be around 40,000 to 50,000 tons, with a gradual decline expected as orders are fulfilled. The inventory situation is relatively stable, with monthly consumption around 200,000 tons [20]. - **Global Demand Trends**: Overseas demand for organic silicon is primarily concentrated in the electronics sector, with increasing needs for specialty silicone and customized silicone due to advancements in semiconductor and AI technologies [21]. - **Raw Material Supply**: DMC production requires approximately 0.52 to 0.53 tons of industrial silicon per ton of DMC, with improvements in processes allowing some companies to reduce this to below 0.5 tons [22]. - **Long-term Price Outlook**: Industrial silicon prices may rise in the short term due to futures market support, but long-term trends remain uncertain due to unresolved supply-demand issues [24]. This summary encapsulates the key insights and projections regarding the organic silicon industry as discussed in the conference call.