Cost support combined with production control to hold prices firm, the silicone market is steadily probing upward [SMM Silicone Weekly Review]

SMM, September 3:

Cost side: On September 3, the average price of #421 silicon (used in silicone) in east China stood at 9,700 yuan/mt, up 100 WoW, while the average price of #421 silicon in east China stood at 9,600 yuan/mt, up 50 WoW. Silicon metal prices held firm this week, with suppliers quoting firm prices and downstream buyers mainly making just-in-time procurement. Methyl chloride prices held firm on Monday, with the market average price at around 3,500 yuan/mt, and the comprehensive production cost of silicone monomer enterprises rose WoW.

DMC: This week, the domestic silicone DMC price center continued to move up, with the quotation range at 13,700-14,000 yuan/mt and the main transaction price at 13,600-13,800 yuan/mt, with transactions up WoW. Firm silicon metal prices on the raw material side, coupled with tight methyl chloride supply, pushed production costs higher, providing cost support for DMC prices. Supply side, monomer plant operating rates remained at around 60%, with monomer plant inventories at mid-to-low levels for the year. Most monomer plants have pre-sale orders scheduled through mid-to-late September, showing a strong willingness to control production and hold prices firm. Overall, domestic DMC prices are expected to consolidate on a strong note in the short term.

Silicone oil: This week, the market quotation range for conventional-viscosity dimethicone stood at 15,100-15,500 yuan/mt, with an average price of 15,300 yuan/mt, and the price center edged up slightly. Cost side, the continuous rise in raw material DMC prices provided fundamental support for silicone oil prices, and enterprises showed a strong willingness to hold prices firm. Demand side, downstream clients mostly purchased on an as-needed basis, with limited procurement enthusiasm.

107 silicone rubber: This week, the market quotation range for conventional-viscosity 107 silicone rubber stood at 13,800-14,300 yuan/mt. Most enterprises have orders scheduled through mid-to-late September, and producers showed a strong willingness to hold prices firm. Demand side, downstream wait-and-see sentiment weakened somewhat, but buyers remained cautious about rushing to buy amid continuous price rises, mainly making just-in-time procurement.

MVQ: This week, the market quotation range for MVQ stood at 14,700-14,800 yuan/mt, with an average price of 14,750 yuan/mt, and the price center edged up slightly. Driven by rising raw material DMC prices on the cost side and sufficient orders, producers showed a strong willingness to hold prices firm. Demand side, downstream rubber compounders maintained just-in-time restocking, with procurement cautious but not halted. As the traditional peak season approaches, market wait-and-see sentiment has eased somewhat.

Overall, the current silicone market is supported by strengthening cost support, continued industry production control, and peak-season demand, and silicone prices are expected to edge up on a stable footing in the short term. However, the upside room depends on downstream acceptance of high-priced raw materials, and attention should still be paid to actual downstream peak-season demand and monomer plant operating dynamics.