







In the first quarter of 2024, DMC prices rose against the background of silicon metal price downturn, once hitting 17,000 yuan/mt, the highest price since March 2023. What were the drivers behind the spike? How was the performance of supply and demand?
From the beginning of 2024 to the present, the prices of silicone products have been at high levels. However, as the peak season is about to end, silicone prices have begun to weaken recently. The average price of DMC has risen from 14,350 yuan/mt at the beginning of the year to the recent peak of 16,550 yuan/mt, up 2,200 yuan/mt. January to February: DMC prices rose for the first time in the year, rising from 14,350 yuan/mt to 15,300 yuan/mt, up 950 yuan/mt. After the Spring Festival, DMC prices rose for the second time, climbing from 15,300 yuan/mt to 16,550 yuan/mt, up 1,250 yuan/mt.
Supply side:
Weekly DMC production fell to 42,100 mt before the Chinese New Year as some producers were closed early for the holiday. After the holiday, production resumption was slow due to malfunction of some equipment. The weekly output was around 42,000 mt in mid-February.
Demand side:
Overseas demand picked up rapidly in January 2024. In January, China's silicone export volume reached 40,700 mt, far exceeding the volume in any month since 2023. In February, companies were on a break and logistics were halted due to the Spring Festival, hurting export volume, but it was only 4.02% lower than the same period last year. Export volume is expected to recover to 38,000 mt in March.
DMC inventory levels are relatively low in 2024 due to production cuts and destocking. Moreover, downstream companies stocked up in January and March in anticipation of the peak season, also driving down inventories rapidly. In summary, the surge in silicone prices in 2024 is primarily attributed to the following factors: ① growing overseas demand ② downstream stocking in the domestic market before the peak season ③ relatively low domestic supply ④ firm pricing amid prolonged period of losses ⑤ price hikes by leading companies.
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