SMM, June 11:
Costs: On June 11, the average price of #421 silicon (used in silicone) in east China was 9,600 yuan/mt, flat MoM, and the average price of #421 silicon in east China was 9,400 yuan/mt, flat MoM. The silicon metal market was in a stalemate with clear tug-of-war between buyers and sellers. Mainstream spot prices remained stable, and downstream users bought the dip. Methyl chloride prices fell 200 yuan/mt WoW, with the market average price at around 2,800 yuan/mt, and the overall production cost for silicone monomer producers declined WoW.
DMC: This week, China’s silicone DMC market stopped falling and stabilized, with prices recovering slightly. The main transaction range was 14,500-14,800 yuan/mt, with the average price at 14,650 yuan/mt, up by about 300 yuan/mt WoW. By region, monomer producer quotations in Shandong were at 14,700 yuan/mt, while mainstream quotations in other regions held at 14,800 yuan/mt. After last week’s industry meeting, the downward trend of silicone market prices, which had been propped up on the surface while drifting lower in practice, was largely halted. However, overall demand remained insufficient, trading only recovered modestly, and high-priced cargoes were difficult to sell. Midstream and downstream buyers quickly returned to a wait-and-see mode after restocking on a need-to basis, making it hard to release volume while stabilizing prices. On the supply side, under the policy impact of a 40% emission reduction standard, some monomer producers have adjusted production cut plans based on their production pace. Upstream supply will subsequently enter a contractionary phase, but the transmission of current emission reductions still takes a period, and the high-output inventory accumulated in May still exists, meaning that short-term supply pressure has not yet been fully relieved. The overall market is now in a tug-of-war shaped by emission reduction policies underpinning the floor and weak demand. In the near term, DMC prices are expected to mainly move sideways in a stable yet fluctuating manner. Moving forward, focus remains on the enforcement of production cuts and the pace of downstream restocking; if enforcement falls short of expectations, the market may remain in the doldrums.
Silicone oil: This week, the market price of silicone dimethyl silicone oil (conventional viscosity) was 16,000-16,500 yuan/mt, with the average price at 16,250 yuan/mt, down 200 yuan/mt WoW. Dragged by weak end-use demand, silicone oil prices edged down slightly. As downstream enterprises consumed their earlier inventories, they entered the market at opportune times, mostly buying the dip with small orders, and showed little inclination for concentrated restocking. Upstream and downstream remained in a phased tug-of-war. However, with DMC prices recently stopping their decline and rebounding, cost support strengthened producers’ willingness to hold prices firm. In the near term, silicone oil prices are expected to mainly consolidate at a generally stable level with a slight fall.
107 silicone rubber: This week, the market transaction price range for silicone 107 silicone rubber (conventional viscosity) was 14,300-14,500 yuan/mt, with the average price at 14,400 yuan/mt, and the transaction center leaned toward the lower end of the range. Persistent weak end-use demand fueled strong pressure from downstream silicone sealant producers to push for lower prices during procurement, and they were cautious about procurement volume. Producers faced shipment pressure, but given that 107 silicone rubber prices were already at a cost-loss level, producers had limited room to offer discounts, and the tug-of-war between upstream and downstream persisted. Overall, with cost support and industry emission reduction expectations, the price of 107 silicone rubber is expected to remain in the doldrums in the short term.
MVQ: This week, the MVQ price range was approximately 15,000-15,400 yuan/mt, with an average price of 15,200 yuan/mt, stable WoW. On the demand side, downstream rubber compounding enterprises, to maintain regular production, stepped in to purchase and restock at lows as previous raw materials were gradually consumed, but to control costs and avoid risks, they generally preferred to purchase in small batches. Currently, with the rebound in raw material DMC prices and strengthened cost support, MVQ market prices are expected to remain stable in the short term.
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