Bottom Support for DMC Prices Gradually Emerges [SMM Analysis]

Last week, silicone monomer enterprises maintained stable quotations, with the market's lowest price at 12,500 yuan/mt. Other enterprises even slightly increased their DMC transaction prices last week. The mainstream transaction prices in the market were 12,500-12,700 yuan/mt, up 200 yuan/mt WoW, but the overall market quotation range has not been adjusted.

At the beginning of the week, domestic monomer enterprises mainly transacted DMC at low prices. However, recently, some monomer enterprises have started to raise their quotations, and trading volume has increased compared to earlier periods. The sentiment of rushing to buy amid continuous price rise and holding back amid price downturn among downstream buyers has slightly restored the order situation for monomer enterprises, providing effective support for DMC prices. SMM understands that this price support is mainly due to the recent rise in costs for domestic monomer enterprises, leading them from profit to loss. Under the pressure of losses, there is a strong sentiment to stand firm on quotes. Additionally, the recent weakening of market competition has led enterprises to collectively refrain from price declines, building bottom support for DMC prices.

However, as DMC prices stabilized, downstream products such as 107 silicone rubber and MVQ began to decline, especially MVQ, whose transaction prices dropped rapidly. This was mainly due to the top-tier enterprises' efforts to stand firm on high prices earlier, coupled with poor market demand, leading to a rapid price drop of 1,000 yuan/mt within just one week. Additionally, recent transaction prices for 107 silicone rubber have also declined, approaching 13,000 yuan/mt.

For future price forecasts, SMM believes that the DMC price range will remain stable, with transaction focus mainly fluctuating. On one hand, the current domestic supply is increasing but at a slower pace, so supply pressure has not yet manifested. On the other hand, silicon metal prices are expected to rise due to the impact of the dry season, with costs still expected to increase. However, the demand for silicone remains poor. Under the dual pressure, DMC prices are expected to remain stable.