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 clients 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 largely adopting a wait-and-see stance. As the holiday approached, spot trading was sluggish. Methyl chloride prices were flat WoW, with mainstream transactions at 1,900 yuan/mt. Overall costs were basically flat compared to last week.

DMC: Domestic silicone DMC prices remained largely 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 major 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 a general decline in market transactions. New order activity was sluggish overall. Supply side, some monomer producers successively entered periods of reduced operating rates and maintenance, and industry supply continued to contract. Furthermore, most monomer producers had ample pre-sold orders, resulting in low inventory pressure. Supply and inventory remained within controllable ranges, and overall willingness to hold prices firm was strong. In the short term, domestic silicone DMC market trading is expected to remain sluggish before the holiday, with prices largely stable. After the holiday, back-and-forth negotiations between upstream and downstream are expected to persist. However, supported by tight supply and strong producer willingness to hold prices firm, market prices may still have slight upward expectations.

Silicone oil: Silicone dimethyl silicone oil prices remained stable this week. The price for conventional viscosity was in the range of 15,200-15,800 yuan/mt, with an average price of 15,500 yuan/mt, flat WoW. Most silicone oil producers have started their holidays, leading to a contraction in supply. On the demand side, sporadic essential clients made small purchases locally, but overall trading volume was limited. Therefore, silicone oil prices are expected to remain largely stable before the holiday.

107 silicone rubber: 107 silicone rubber prices held steady this week. The market price range for conventional viscosity was quoted at 14,200-14,800 yuan/mt, with an average price of 14,500 yuan/mt, flat WoW. Pre-holiday downstream stocking demand was largely completed, and current new order activity in the market is sluggish. In regions 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 silicone rubber market prices are expected to remain largely stable before the holiday.

MVQ: MVQ prices were in the range of approximately 14,600-15,000 yuan/mt this week, with an average price of 14,800 yuan/mt, flat WoW. Due to the approaching Chinese New Year holiday, some producers adjusted their production pace, leading to a slight decrease in unit 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.