Cautious downstream purchasing sentiment in the silicone market, with weak new order transactions [SMM Silicone Weekly Review]

SMM, September 17:

Cost: On September 17, the average price of #421 silicon (used in silicone) in east China stood at 9,700 yuan/mt, flat WoW, while the average price of #421 silicon in east China was 9,550 yuan/mt, down 50 yuan/mt WoW. This week, silicon enterprises held quotations steady. Futures were weak due to expectations for polysilicon production cuts. Driven by pre-holiday restocking demand, spot silicon metal transactions recovered. This week, the average price of methyl chloride was 3,600 yuan/mt, up 50 yuan/mt WoW. The comprehensive production cost of silicone monomer enterprises rose WoW.

DMC: This week, the mainstream quotation range for domestic silicone DMC was 14,500-14,900 yuan/mt, with an average price of 14,700 yuan/mt. After monomer producers raised prices successively last week, the market this week mainly digested the increases. Monomer producers kept quotations stable, but transactions for high-priced orders were relatively weak. On the raw material side, prices of #421 silicon metal (used in silicone) in east China remained firm. Affected by geopolitical conditions, imported methanol prices stayed strong, providing some support for silicone DMC prices. On the supply side, some monomer producers resumed production this week, while others maintained normal operations, and the industry operating rate edged up. On the demand side, downstream clients overall continued to purchase mainly on a need-to basis and remained cautious about high-priced procurement.

Silicone oil: This week, the market price of conventional-viscosity dimethicone was generally stable, with a quotation range of 15,800-15,900 yuan/mt and an average price of 15,850 yuan/mt. Cost side, raw material DMC stabilized at highs, and with tight supply of silicone ether, silicone oil enterprises showed strong sentiment to hold prices firm.

107 silicone rubber: This week, the price center of conventional-viscosity 107 silicone rubber moved up slightly, with a quotation range of 14,500-14,700 yuan/mt and an average price of 14,600 yuan/mt. Currently, 107 silicone rubber and DMC prices are inverted. As DMC prices rose, 107 silicone rubber was forced to follow higher. Demand side, affected by raw material 107 silicone rubber prices, some downstream silicone sealant enterprises issued price increase letters accordingly. However, the recovery in the terminal real estate market was limited, and demand did not see a substantial rebound. Downstream enterprises still purchased mainly on a need-to basis, and market trading sentiment was mediocre.

MVQ: This week, MVQ market prices remained stable at highs overall, with a quotation range of 15,400-15,700 yuan/mt and an average price of 15,550 yuan/mt. Most monomer producers had low inventory, and with sufficient pre-sale orders, spot circulation in the market was tight, giving producers strong willingness to hold prices firm. Demand side, downstream rubber compounders showed average acceptance of high-priced raw materials and mainly restocked on a need-to basis.

Overall, the silicone market is currently in a tug-of-war between upstream and downstream: supply side shows strong willingness to hold prices firm, while demand side mainly restocks on a need-to basis, and high-priced transactions are limited. In the short term, silicone prices will remain stable. Going forward, attention should be paid to changes in downstream pre-holiday stockpiling pace and the price trend of raw material methanol.