Under the support of fundamentals and with the suspension of sales, DMC prices finally increased [SMM Analysis]

Recently, most DMC companies began to suspend sales, causing panic in the market. Last week, after the online price suspension in DMC companies in Shandong, the DMC price was raised by 300 yuan/mt to 13,200 yuan/mt. Last week, the leading companies kept DMC prices stable, with the current quotation at 13,900 yuan/mt. The quotation was relatively high, and there were no transactions. Other companies raised their DMC quotations to around 13,500 yuan/mt, with mainstream transaction prices around 13,300 yuan/mt.

At the beginning of the week, some domestic monomer companies began to suspend quotations, while other monomer companies appropriately raised the prices of some of their products. On August 9, the opening quotation of DMC from Shandong monomer companies was raised by 300 yuan/mt, and other monomer companies also increased their quotations. The market's mentality of buying on the rise was quickly stimulated, and downstream companies began to enter the market for procurement, with monomer companies receiving orders well.

Overall, the current round of silicone product price increases is driven by both sentiment and fundamental factors. On the sentiment side, the industry was in a state of long-term losses, leading to a strong willingness from enterprises to hold offers firm. On the fundamental side, the current inventory of domestic monomer companies is not much, with only about 70,000 mt, which is at a conventional level, and the inventory pressure is not significant. In summary, the controllable inventory and sentiment factors are the main reasons for this round of silicone product price increases.

SMM believes that prices will still have a slight increase. After the price increase on August 9, the orders of monomer companies were good. With the support of order volume, the willingness to push prices up again was strong. At the same time, leading domestic companies also plan to raise prices in mid-August. In the context of price increases and the approaching peak season, the purchasing mentality of downstream companies is turning optimistic, and transactions are expected to improve, with room for price increases.