DMC Prices At Downside Risk, Even As Producers Cut Production

DMC prices in the online shopping mall of Shandong-based factories opened at 14,700 yuan/mt this week, up 300 yuan/mt WoW. Offers from leading enterprises stood stable at 14,500 yuan/mt this week. Some DMC plants gave no offers, while the rest averagely offered at 14,700-14,800 yuan/mt. However, rigid demand was largely reported.

On DMC costs, as of October 26, 421# silicon (for silicone) prices in East China averaged 16,300 yuan/mt, down 100 yuan/mt WoW. Offers for methyl chloride in Shandong were 2,700 yuan/mt. In a word, overall costs declined this week.

Looking at the future, SMM believed that some DMC plants will suspend making quotations. Meanwhile, forthcoming shutdown of domestic DMC plants will be monitored, and the shutdown duration will be long. In addition, some downstream demand appeared muted with the end of the peak season. To tackle weak demand, DMC plants will definitely lower operating rate. The overall market performance is that both supply and demand are weak. At present, inventory of DMC plants hiked. Downstream buyers will aim to meet rigid demand. Therefore, SMM believed that DMC prices are unlikely to rise next week, with potential downside risk.