Downstream Procurement Sentiment in the Silicone Market Remained Cautious, with Weak New Order Transactions [SMM Weekly Silicone Review]

SMM News, March 12:

Cost: On March 12, east China #421 silicon (used in silicone) was at 9,850 yuan/mt, unchanged MoM, while east China #421 silicon was at 9,600 yuan/mt, up 50 yuan/mt MoM. This week, silicon metal quotations held up well, with widespread wait-and-see sentiment in the market and weak downstream purchasing enthusiasm. Methyl chloride prices fluctuated within a stable range, with mainstream market transactions at 2,200 yuan/mt. Overall costs fluctuated slightly stronger WoW, but the impact remained relatively limited.

DMC: This week, mainstream quotations for China's silicone DMC market were in the range of 14,000-14,300 yuan/mt, unchanged WoW. By region, monomer enterprises in Shandong quoted 14,000 yuan/mt, while mainstream monomer enterprises in other regions quoted 14,300 yuan/mt. After the price increase was completed last week, quotations overall remained stable this week, but actual market transactions were relatively weak. Cost side, affected by geopolitical developments, raw material methanol prices held up well, also providing some support for silicone DMC prices. However, the subsequent impact and changes still need close attention to the magnitude of raw material price fluctuations and the duration of their effects. Supply side, the operating rate of most upstream enterprises was around 70%, and market supply remained stable. Meanwhile, as the April 1 period for the cancellation of the silicone export tax rebate policy approached, export orders still supported current presale orders, but that support is expected to gradually weaken after mid-month. In addition, as new order intake varied among upstream enterprises, a few enterprises offered slight concessions to major cooperative clients to stabilize order volumes. Demand side, with relatively sufficient inventory, midstream clients showed weak willingness to restock in the short term, and overall procurement still focused on just-in-time procurement, with sentiment remaining cautious.

Silicone Oil: This week, the market price of conventional-viscosity silicone dimethyl silicone oil was 15,500-16,100 yuan/mt, with an average price of 15,800 yuan/mt. As the period for the cancellation of the export tax rebate policy approached, overall market performance of export order transactions was moderate, providing some short-term support for prices, but domestic demand was still mainly just-in-time procurement.

107 Silicone Rubber: This week, the market quotation range for conventional-viscosity silicone 107 silicone rubber was 14,500-15,100 yuan/mt, with an average price of 14,800 yuan/mt. Boosted by favorable macro policies in the property market and the holding of the annual curtain wall exhibition, market attention to construction sealants increased. In addition, affected by the transmission of rising raw material costs, downstream deep-processing enterprises such as silicone sealant producers also intensively issued price increase notices, creating strong market momentum for price hikes. However, as overall market demand has not yet shown substantive improvement, end-users remained highly price-sensitive and still mainly made just-in-time procurement, with the market overall showing a divergence pattern of relatively weak spot performance but improving expectations.

MVQ: This week, the MVQ price range was about 14,900-15,300 yuan/mt, with an average price of 15,100 yuan/mt. Judging from new order transactions, trading volume at the current high price level was weak, downstream procurement was mainly just-in-time procurement, and buyers maintained a wait-and-see attitude toward subsequent market price trends.