SMM, October 15:
Costs: This week, upstream raw material prices for silicone rose overall, pushing up comprehensive production costs across the industry. As of October 15, the average price of 421# silicon metal for silicone use in east China stood at 9,750 yuan/mt, up 0.5% WoW, with mainstream transaction prices averaging 9,600 yuan/mt, up 0.52% WoW. Silicon metal prices remained firm. Meanwhile, methanol prices fluctuated at highs, driving methyl chloride costs up as well. This week, the average price of methyl chloride was 3,700 yuan/mt, up 2.8% WoW. Driven by multiple raw material price increases, comprehensive production costs for silicone monomer producers continued to climb, and sentiment for holding prices firm and stable was relatively strong in the market.
DMC: This week, China's silicone DMC market prices remained stable, with mainstream transaction prices averaging 14,500 yuan/mt. Raw material prices for silicon metal and methanol stayed firm at highs, providing strong cost support for DMC prices. Monomer producers maintained stable offers with sufficient willingness to keep prices steady. On the supply side, overall operating rates remained at 60%-63%, keeping spot supply relatively manageable. On the demand side, downstream end-users showed low acceptance of high raw material prices, and the market lacked momentum for concentrated restocking. Transactions relied mainly on small rigid-demand orders, with high-priced cargoes facing significant resistance and overall trading sentiment sluggish.
Silicone oil: This week, prices of regular-viscosity dimethicone edged up, with market quotations ranging from 15,800 to 16,000 yuan/mt and a weekly average price of 15,900 yuan/mt, up 0.31% WoW. On the cost side, upstream DMC prices continued to fluctuate at highs, providing solid support for silicone oil quotations, and producers' offers remained firm overall. However, downstream end-use demand stayed weak, and market purchasing enthusiasm was insufficient to keep pace with raw material price increases. Silicone oil producers faced difficulties in passing on price hikes, limiting the extent of price increases this week.
107 silicone rubber: This week, prices of regular-viscosity 107 silicone rubber pulled back slightly, with market quotations ranging from 14,400 to 14,600 yuan/mt and an average market price of 14,500 yuan/mt. At present, 107 silicone rubber prices are basically on par with raw material DMC prices, and producers generally face losses, with production profits under significant pressure. On the demand side, downstream silicone sealant producers operated at stable but weak rates, remained cautious about purchasing high-priced raw materials, and showed no concentrated restocking. Only a small number of rigid-demand orders existed in the market, and overall trading was sluggish.
MVQ: This week, MVQ prices remained firm, with mainstream quotations ranging from 15,400 to 15,700 yuan/mt and an average market price of 15,550 yuan/mt. Upstream DMC prices stayed stable at highs, providing ample cost support for the MVQ market, and producers maintained a steady stance on quotations. Market circulation was dominated by deliveries of previously accumulated orders, and cost pass-through to downstream rubber compounders was not smooth. Downstream purchases were mainly rigid demand, with a cautious attitude toward stockpiling.
Overall, this week saw a prominent tug-of-war between upstream and downstream in the silicone market. Upstream cost support remained solid, and producers showed strong willingness to stabilize prices. However, downstream end-use demand stayed persistently weak, and the market lacked incremental support, with trading across all product categories relatively subdued. In the short term, China's silicone market prices are likely to remain mostly stable with sideways movement, and price changes will depend mainly on fluctuations in upstream raw material prices as well as improvement and volume growth in downstream end-use demand.
![Limited arrivals extend silicon metal social inventory destocking [SMM Silicon Inventory]](https://imgqn.smm.cn/usercenter/ZsMtd20251217171723.jpeg)
