Silicone product prices remain firm, while market transactions are sluggish [SMM Silicone Weekly Review]

SMM, July 9 –

Cost: On July 9, the average price of #421 silicon (used in silicone) in east China stood at 9,500 yuan/mt, down 50 yuan/mt WoW, while the average price of #421 silicon in east China was 9,350 yuan/mt, down 50 yuan/mt WoW. This week, silicon metal prices weakened slightly, futures prices fluctuated significantly, and silicon enterprises maintained stable quotations. Methyl chloride prices held steady WoW, with a market average of around 2,600 yuan/mt. The comprehensive production costs of silicone monomer enterprises continued to trend down WoW, and overall cost pressure also eased correspondingly.

DMC: This week, China’s silicone DMC market was characterized by firm quotations, sluggish transactions, and a stalemate in the tug-of-war between upstream and downstream. In terms of prices, the mainstream quotation range for DMC was 13,900-14,000 yuan/mt. By region, monomer enterprises in Shandong quoted 13,900 yuan/mt, while the mainstream quotation in other areas stood mainly at 14,000 yuan/mt. Demand side, end-use demand showed no significant improvement. Coupled with market doubts over the implementation of production cuts by producers, mid- and downstream players generally held a wait-and-see sentiment. Market trading was sluggish, with only sporadic small rigid-demand orders following. Supply side, monomer enterprises had a certain buffer from rigid-demand orders collected at low prices early in the month, and their willingness to hold prices firm was strong. In terms of production, due to varying circumstances among monomer enterprises, the implementation of the industry’s 60% production cut target was still in progress. However, some individual monomer enterprises still underwent maintenance shutdowns, so the weekly industry operating rate declined WoW, while the overall impact of supply contraction remained weak. Overall, at this stage, supply contraction remains weak, coupled with sluggish end-use demand, and the market still lacks substantial support. In the short term, China’s silicone DMC market will continue to operate under pressure on a weak note.

Silicone Oil: This week, regular-viscosity dimethyl silicone oil market prices ranged from 15,500 to 16,200 yuan/mt, with an average price of 15,850 yuan/mt, and the market showed an overall weak stalemate. Cost side, some producers were still weighed down by high-cost raw material inventories from earlier periods, leading to high production costs and profit pressure. Although DMC prices were being held firm and had edged up, they remained weak and under pressure, providing only weak overall cost support. Demand side, downstream end-use demand remained sluggish, market trading was sluggish, and lacked growth support. Overall, the silicone oil market showed a pattern of rigid cost pressure and absent demand, and prices are expected to mainly consolidate on a subdued note in the short term.

107 Silicone Rubber: This week, regular-viscosity 107 silicone rubber market prices ranged from 13,700 to 14,300 yuan/mt, with an average price of 14,000 yuan/mt. Supply side, some SMEs, leveraging the advantage of low-priced raw material purchases from earlier periods, still offered discounts to sell. Monomer enterprises, constrained by production cuts and price-holding strategies, saw high-priced deals blocked. Demand side, the end-use market remained weak. Downstream silicone sealant enterprises, in order to ease financial pressure, had a strong tendency to push for lower prices in procurement, and showed no willingness to actively restock, only maintaining small rigid-demand orders. Overall market trading was sluggish. Therefore, in the short term, amid the tug-of-war between sellers and buyers, 107 silicone rubber prices will likely remain under pressure and consolidate.

MVQ: This week, the MVQ market price range was 14,500-14,800 yuan/mt, with the average price at 14,650 yuan/mt. Currently, end-use demand remains sluggish, while downstream rubber compounders had insufficient orders. They approached raw material procurement cautiously, adopted a wait-and-see attitude, and pushed for lower prices, providing insufficient support for MVQ market prices. In the short term, given weak demand, MVQ prices are expected to consolidate on a weak note as well.