Tug-of-war between sellers and buyers continues in the silicone market; overall new orders remain subdued ahead of the holiday [SMM Silicone Weekly Review]

SMM, September 30:

Cost: On September 30, 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 stood at 9,550 yuan/mt, flat WoW. Driven by downstream stockpiling before the holiday, coupled with cost support from silicon metal and expectations for production cuts at silicon plants in southwest China in Q4, silicon enterprises held firm sentiment to hold prices. This week, the average price of methyl chloride was 3,600 yuan/mt, flat WoW. The comprehensive production cost of silicone monomer enterprises remained stable WoW.

DMC: This week, China's silicone DMC market saw slightly lower transactions, with an average price of 14,500 yuan/mt. During the week, after one monomer plant lowered its DMC offer to 14,500 yuan/mt, other monomer plants maintained their previous offers, showing strong willingness to hold prices before the holiday, but there was virtually no trading at high prices in the market. On the raw material side, #421 silicon metal (used in silicone) in east China remained firm, and methanol prices were firm this week, providing some support to silicone DMC prices. On the supply side, one monomer plant resumed production this week, while others maintained normal operations, and the industry operating rate edged up. On the demand side, downstream clients showed strong wait-and-see sentiment, actual transaction price center was weak, and pre-holiday purchases were made on an as-needed basis.

Silicone oil: This week, the market price of conventional viscosity dimethyl silicone oil remained stable, with a quotation range of 15,800-15,900 yuan/mt and an average price of 15,850 yuan/mt, flat WoW. On the cost side, raw material DMC remained high, supporting silicone oil enterprises to hold firm offers, but downstream end-use demand release was insufficient, and purchases were mainly need-based, with overall new orders in the market subdued before the holiday.

107 silicone rubber: This week, the market price of conventional viscosity 107 silicone rubber remained stable, with a quotation range of 14,500-14,700 yuan/mt and an average price of 14,600 yuan/mt. The price of 107 silicone rubber remained on par with DMC prices, and some enterprises even saw inverted prices. On the demand side, downstream silicone sealant enterprises showed moderate acceptance of high-priced raw materials, with purchases mainly consisting of small need-based orders, strong wait-and-see sentiment in the market, and overall lackluster trading.

MVQ: This week, MVQ market prices were firm, with a quotation range of 15,400-15,700 yuan/mt and an average price of 15,550 yuan/mt. DMC remained stable at highs overall, providing strong cost support for MVQ. Currently, MVQ enterprises face relatively small inventory pressure, and most producers have orders scheduled through mid-October. On the demand side, MVQ transmission to downstream end-users was not smooth, downstream rubber compound enterprises remained cautious in stockpiling, and purchases were maintained at need-based restocking levels.

Overall, the silicone market continued to see a tug-of-war between sellers and buyers this week. Monomer plants showed strong willingness to hold prices before the holiday, while demand was mainly need-based restocking, and actual pre-holiday transactions were weak. In the short term, silicone prices will fluctuate at highs, and attention should be paid to the direction of the monomer plant industry meeting in early October and changes in downstream restocking pace after the holiday.