Silicone DMC August Production Hit New High for the Year, Subsequent Output May Decline Due to Maintenance [SMM Analysis]

According to SMM statistics, domestic silicone DMC production in August was 216,900 mt, up 7.27% MoM. The total production from January to August 2024 was 1.5845 million mt, up 16.21% YoY. August domestic silicone DMC production reached a new high for the year, but subsequent production is expected to decline due to shutdowns at some companies for maintenance, with a reduction of approximately 13,000 mt.

Specifically, the significant production increase in August was mainly due to new capacity ramp-ups at monomer companies in Hubei, Jiangxi, and Hebei, which contributed to the production growth. Additionally, some monomer companies that had originally planned maintenance in August postponed their shutdowns due to increased market profits, resulting in higher overall operating rates for the month. However, in late August, a monomer company in Zhejiang had to shut down its production line due to an unexpected accident. Furthermore, monomer companies in north and east China also began shutdowns for maintenance, leading to a reduction in the production increase. Overall, August production reached 216,900 mt, marking a new high for the year.

SMM believes that September DMC production will decline. Among 13 domestic monomer companies, 7 will undergo maintenance, which SMM understands to be mostly technical upgrades or routine maintenance, with only a few due to specific reasons. Therefore, the overall industry operating rate in September is expected to decrease, with production expected to drop to around 205,000 mt, indicating a recovery on the supply side.