The overall market is gradually entering a holiday period, with prices of all product lines stabilizing. [SMM Silicone Weekly Review]

SMM February 12:

Cost side, #421 silicon (used in silicone) in east China was at 10,000 yuan/mt on February 12, flat WoW, while #421 silicon in east China was at 9,650 yuan/mt, flat WoW. Silicon metal futures prices weakened continuously this week, with a small number of downstream users restocking at low prices. Logistics were tight ahead of the Chinese New Year, and most new orders were scheduled for delivery after the holiday, with silicon enterprises mostly adopting a wait-and-see attitude. As the holiday approached, spot trading was sluggish. Methyl chloride prices edged down WoW, with mainstream transactions at 1,900 yuan/mt. Overall costs were basically flat compared with last week.

DMC: Domestic silicone DMC prices remained stable this week, with the mainstream trading range at 13,800-14,000 yuan/mt, flat WoW. By region, monomer producers in Shandong quoted 13,800 yuan/mt, while other mainstream monomer producers quoted 14,000 yuan/mt. Demand side, as the Chinese New Year holiday approached, more midstream and downstream enterprises began holidays, leading to generally reduced market transactions and sluggish new order activity overall. Supply side, some monomer producers successively entered periods of reduced operating rates and maintenance, with industry supply continuing to contract. Furthermore, most monomer producers currently have sufficient pre-sold orders and relatively low inventory pressure, keeping supply and inventory within controllable ranges, resulting in a strong overall willingness to hold prices firm. In the short term, domestic silicone DMC market trading is expected to remain sluggish before the holiday, with prices largely stable. Post-holiday, back-and-forth negotiations between upstream and downstream are expected to persist, but supported by tight supply and producers' strong willingness to hold prices firm, market prices may still have slight upward expectations.

Silicone oil: Prices for organic silicon dimethyl silicone oil remained stable this week, with conventional viscosity prices at 15,200-15,800 yuan/mt and an average price of 15,500 yuan/mt, flat WoW. Currently, most silicone oil producers have started their holidays, leading to reduced supply. Demand side, sporadic essential clients made small purchases locally, but overall trading volume was limited. Therefore, silicone oil prices are also expected to remain largely stable before the holiday.

107 silicone rubber: Prices for organic silicon 107 rubber held steady this week, with the market price range for conventional viscosity quoted at 14,200-14,800 yuan/mt and an average price of 14,500 yuan/mt, flat WoW. Pre-holiday downstream stocking demand has been largely completed, and current new order activity in the market is sluggish. In areas where logistics have not yet halted, producers are mainly fulfilling previous orders. As the holiday approaches, demand is contracting, and supply-side operating rates are also at low levels. Therefore, in the short term, 107 rubber market prices are expected to remain largely stable before the holiday.

MVQ: The price range for MVQ this week was approximately 14,600-15,000 yuan/mt, with an average price of 14,800 yuan/mt, flat WoW. Affected by the approaching Chinese New Year holiday, some producers adjusted their production pace, leading to a slight decrease in plant operating rates and an overall relative contraction in supply. Most downstream rubber compound enterprises have also basically gone on holiday, resulting in low overall market activity and a strong wait-and-see sentiment. Therefore, it is expected that MVQ prices will maintain fluctuations within the current range in the short term.