Monomer capacity showed mixed performance, supply expectations weakened [SMM Analysis]

Recently, domestic silicone monomer capacity has shown mixed performance, with some monomer enterprises undergoing maintenance, leading to a decline in operations and a subsequent reduction in supply expectations.

Specifically, domestic monomer capacity has gradually come online, with enterprises in east and north China entering trial production and reaching full capacity. As of now, 2024 monomer capacity has reached 1.28 million mt/year, with an additional 150,000 mt of capacity expected to come online. Although the capacity release rate is fast, the operating capacity remains low, and the new capacity's operational stability is somewhat uncertain, leading to a slower conversion rate of capacity utilisation. SMM statistics show that last week's domestic monomer capacity utilisation rate is 74.34%, gradually declining since August. It is expected that some production lines will resume operations, and new capacity in Shandong will soon start production, potentially increasing the utilisation rate.

From the perspective of weekly production, although the operating capacity has weakened recently, the overall production trend remains upward. SMM statistics indicated that last week's DMC production was 48,100 mt, down 3.61% WoW, mainly due to some equipment in Zhejiang monomer enterprises undergoing maintenance and technical upgrades, leading to production line shutdowns. Future DMC production is expected to continue its upward trend, with some production lines in Hebei and Shandong set to start in September, gradually increasing production. It is anticipated that the weekly production peak in September will return to around 52,000 mt.