DMC Prices Hitting YTD Low [SMM Review]

SHANGHAI, Sep 20 (SMM) - Today, a monomer factory in Shandong province, in order to promote the transaction, lowered the DMC quotation by another 400 yuan/mt to 18,400 yuan/mt, a new low since the beginning of the year. The quotes from top-tier monomer factories stabilised for the moment.

According to SMM understanding, after the Mid-Autumn Festival, monomer factories lowered the prices one after another in an effort to promote the sales, but failed as the downstream players demanded even lower prices. The price cut by 400 yuan/mt today has intensified the game between the upstream and downstream players, properly simulating the buying interest of downstream buyers. However, SMM believes that the price drop of monomer factories is simply a means to promote the transactions. Once downstream companies start to restock, the prices will rebound immediately.

On the cost side, the prices of CH3CL in Shandong fell sharply yesterday, and the cost pressure of monomer factories was slightly relieved. However, the prices of 421# silicon metal are stable at present, and it is expected that the profit margin of the monomer factories will not expand in the future. On the supply side, the market remains oversupplied. On the demand side, although the real estate policies and the resumption of work across the board have been progressing smoothly, it will take some time for the policies and actions to exert power. Hence the recent demand is still weak.

On the whole, the DMC prices are unlikely to fall without a bottom line, but the demand has not improved either. As such, DMC prices are likely to remain low in the near future.