Under Multiple Factors, Wait-and-See Sentiment Heats Up in the Mid-to-Downstream Silicone Market [SMM Silicone Weekly Review]

SMM, May 21:

Cost: On May 21, the average price of #421 silicon (used in silicone) in east China was 9,600 yuan/mt, down 50 yuan/mt WoW, and the average price of #421 silicon in east China was 9,400 yuan/mt, down 100 yuan/mt WoW. Silicon metal prices trended weak at the beginning of the week, with the center shifting slightly lower before moving sideways. Methyl chloride prices fell approximately 200 yuan/mt WoW to around 3,000 yuan/mt. The comprehensive production costs of silicone monomer enterprises declined WoW, and cost pressure eased somewhat.

DMC: This week, the transaction center of China's silicone DMC market remained stable, with the mainstream transaction range at 14,800-15,000 yuan/mt. In terms of regional quotations, monomer enterprises in Shandong maintained quotations at 14,800 yuan/mt, while mainstream quotations in other regions were 15,000-15,200 yuan/mt. Affected by the price adjustment moves of top-tier players last week, overall market sentiment weakened, wait-and-see sentiment among mid- and downstream enterprises increased, new order transactions were mediocre, and the tug-of-war between upstream and downstream intensified. However, in the short term, upstream producers' DMC pre-sale order schedules can sustain through early June. China's silicone DMC market prices are expected to remain stable, but if subsequent new order transactions remain poor, prices will face downward pressure.

Silicone oil: This week, the market price of regular-viscosity dimethyl silicone oil was 16,200-16,700 yuan/mt, with an average price of 16,450 yuan/mt, stable WoW. Cost side provided certain support for prices. Quotations stabilized after rising, but downstream acceptance of high prices was limited, with procurement mainly driven by small rigid demand volumes, and support for high prices was insufficient. On the supply side, affected by slower shipments, some producers reduced operating rates.

107 silicone rubber: This week, the market transaction price range for regular-viscosity 107 silicone rubber was quoted at 14,800-15,200 yuan/mt, with an average price of 15,000 yuan/mt, down 200 yuan/mt WoW. Affected by price adjustments from top-tier players, the market transaction center shifted lower. Some enterprises already experienced losses, and market expectations weakened. Coupled with end-use demand entering the off-season, downstream finished product shipments slowed down, and raw material procurement remained cautious and wait-and-see. If new orders remain sluggish, 107 silicone rubber prices are expected to face further downward pressure.

MVQ: This week, the MVQ price range was approximately 15,200-15,500 yuan/mt, with an average price of 15,350 yuan/mt. The supply side showed clear differentiation, with top-tier players offering low prices to boost volume and collect payments, while other producers maintained stable quotations supported by low operating rates and pre-sale orders. Demand side, compounded rubber enterprises maintained a cautious stance. Although top-tier players offered discounts to facilitate shipments, constrained by minimum order quantities, payment terms, and capital pressure, wait-and-see sentiment in the market intensified. Enterprises mainly focused on digesting inventories and making small rigid-demand purchases.