Most silicone monomer enterprises suspended quotes, DMC prices rebounded. [SMM Silicone Weekly Review]

SMM July 30 news:

Cost side: On July 30, the average price of #421 silicon (used in silicone) in east China was at 9,500 yuan/mt, unchanged WoW, and the average price of #421 silicon in east China was at 9,350 yuan/mt, unchanged WoW. This week, silicon metal fundamentals were weak, coupled with sustained supply-side pressure, market sentiment turned negative, and prices consolidated on a subdued note. Methyl chloride prices were stable WoW, with a market average price around 2,500 yuan/mt, and comprehensive production costs for silicone monomer enterprises were stable WoW.

DMC: This week, DMC prices held firm and rose strongly, with quotations ranging from 12,500 to 12,800 yuan/mt, up 1,050 yuan/mt WoW. Demand side, prices had previously fallen to a stage low, and raw material inventories at midstream and downstream enterprises also dropped to low levels. Some clients entered the market to complete phased stockpiling purchases, driving destocking of monomer enterprise inventories. Pre-sale orders were scheduled to late August. Supported by pre-sale orders, most monomer enterprises halted quotations, waiting for unified adjustments after the August industry meeting. Only a small number of producers released sporadic cargoes on a one-order-one-negotiation basis. Low-priced supply in the market continued to tighten, and downstream bargaining room was significantly compressed. Supply side, multiple monomer facilities that had been under maintenance gradually restarted. Overall industry operating rates and weekly supply rose WoW. However, this round of dip-buying by midstream and downstream shifted inventories from upstream plant warehouses to downstream, significantly easing inventory pressure on monomer enterprises themselves. With the August industry meeting approaching, signals of production cuts and price holding re-emerged, and upstream enterprises' bullish expectations rose. The domestic DMC market is expected to hold up well in the short term.

Silicone oil: This week, transaction prices for conventional viscosity dimethyl silicone oil ranged from 13,900 to 14,500 yuan/mt, averaging 14,200 yuan/mt. Cost side, the sharp rise in raw material DMC prices strengthened cost support, enhancing silicone oil producers' willingness to hold prices firm. Demand side, last week, stimulated by low prices from top-tier players, some downstream clients had gradually completed rigid-demand restocking. However, as end-use demand remained in the off-season, purchases remained cautious, mainly for immediate needs. Large-scale restocking was postponed, and the tug-of-war between buyers and sellers persisted, with further attention on the tone set by the August industry meeting.

107 silicone rubber: This week, prices of conventional viscosity 107 silicone rubber also showed an uptrend with firm prices, ranging from 12,500 to 13,000 yuan/mt. Last week, driven by low-price shipments from top-tier players, downstream clients entered the market to stockpile at dip-buying levels, leading to inventory release at upstream producers. Supported by this, most monomer enterprises have currently halted quotations, with sporadic orders mostly on a one-order-one-negotiation basis. However, with end-use demand consistently in the off-season, some clients still maintained a wait-and-see sentiment.

MVQ: This week, MVQ prices were held firm at 13,000–13,500 yuan/mt. Driven by the previous low-price market conditions, some downstream enterprises had bought the dip and stockpiled, leading to a transfer of inventory away from upstream producers. This week, the price of raw material DMC was raised significantly, strengthening cost support. Under the dual influence of these factors, MVQ prices were continuously held firm and moved upward this week. However, given the lack of improvement in end-use demand, downstream enterprises were cautious about further rushing to buy amid the continued price rise.