Silicone Market Transaction Center Stabilized, Downstream Purchased as Needed on Price Dips [SMM Silicone Weekly Review]

SMM News, March 26:

Cost: On March 26, east China #421 silicon (used in silicone) was at 9,850 yuan/mt, basically stable MoM, and east China #421 silicon was at 9,600 yuan/mt, basically stable MoM. This week, amid price negotiations in the silicon metal market, prices moved sideways and consolidated. Recently, some #421 silicon orders were concluded by monomer plants, with order prices basically stable from the previous period. In addition, as the continued rise in the price of methanol, a key upstream raw material, was transmitted downstream, methyl chloride prices also showed a fluctuate upward trend, with market prices reaching about 2,250 yuan/mt. As a result, the overall production cost of silicone monomer enterprises edged up WoW.

DMC: This week, the transaction range in China’s silicone DMC market was 13,800-14,300 yuan/mt, basically stable WoW. By regional quotations, monomer enterprises in Shandong quoted 14,000 yuan/mt, while mainstream monomer enterprises in other regions mostly quoted 14,300 yuan/mt. After the phased price fluctuations last week, the main transaction range gradually stabilized. Demand side, the traditional peak-season effect of the “Golden March” did not materialize as expected, and overall demand improvement remained weak. At present, raw material inventory at mid- and downstream players was destocked slowly, with support mainly from rigid demand. However, affected by multiple factors including the release of procurement demand at month-end, expectations for an industry conference in early April, and the continued rise in raw material costs, some midstream clients, starting from last week, made timely restocking on dips based on their own production needs and inventory cycles, though overall willingness to accept high-priced cargo remained relatively limited. Supply side, under the normalized supervision of the emissions reduction system, the industry’s overall operating rate remained at a low level. Coupled with the start of periodic maintenance at some monomer enterprises, overall supply declined slightly. In addition, presale scheduling showed divergence: enterprises with better order scheduling still had a strong willingness to hold prices firm, while those under scheduling pressure were relatively passive in shipments pace. Therefore, with current market support from both the cost side and tightening supply, as well as the transmission of upstream enterprises’ sentiment to hold prices firm, China’s silicone DMC prices are expected to remain mainly stable in the short term. Going forward, close attention still needs to be paid to the actual downstream restocking pace and supply-side operating conditions.

Silicone Oil: This week, the market price for conventional-viscosity silicone dimethyl silicone oil was 15,500-16,100 yuan/mt, with an average price of 15,800 yuan/mt, basically stable WoW. As overall downstream demand improvement was not obvious, procurement sentiment among end-users and downstream enterprises remained cautious. Trading activity in the silicone oil market weakened, with purchases mainly consisting of small just-in-time orders and weak willingness for bulk restocking.

107 Silicone Rubber: This week, the quoted market price range for conventional-viscosity silicone 107 rubber was 14,200-15,100 yuan/mt, with an average price of 14,650 yuan/mt, basically stable WoW. Although downstream silicone sealant enterprises were stimulated by the concentrated price adjustments over the previous two weeks, which helped drive some raw material inventory destocking, overall end-use demand remained weak, resulting in poor upward transmission of demand. Therefore, current market transactions were still mainly driven by just-in-time procurement, with cautious acceptance of high-priced cargo.

MVQ: This week, the MVQ price range was about 14,900-15,300 yuan/mt, with an average price of 15,100 yuan/mt. As month-end approached, coupled with stimulus from expectations for the meeting in early April, some downstream compound rubber enterprises appropriately bought the dip. However, as there was still support from current raw material inventory and confidence in the market remained insufficient, procurement was mainly limited to phased rigid demand.