The price defense line collapsed, and the transaction prices of all products in the silicone market were significantly reduced [SMM Silicone Weekly Review].

SMM April 17 News:

Cost side, the average price of #421 silicon (for silicone) in east China was 11,550 yuan/mt this week, down 50 yuan/mt WoW. The average price of #421 silicon in east China was 10,700 yuan/mt, down 200 yuan/mt WoW. Domestic silicon metal producers lowered their quotations this week, and silicone companies made just-in-time procurement at low prices, but the demand side of silicon metal remained in the doldrums, and subsequent prices are more likely to fall than stabilize. The price of monochloride remained stable this week, with the transaction price in east China at 2,200 yuan/mt. Although the overall cost declined, the profit margin of monomer companies narrowed due to the sharp drop in DMC prices.

DMC: Domestic DMC quotations ranged from 12,200 to 13,000 yuan/mt this week, with the average price down 1,150 yuan/mt WoW. The online store of a Shandong monomer company opened DMC quotations at 12,500 yuan/mt, down 1,400 yuan/mt WoW. The DMC quotation of a leading enterprise remained unchanged at 14,800 yuan/mt, but it was difficult to take orders. The DMC quotations of other domestic monomer companies were around 14,000 yuan/mt this week, unchanged WoW. The transaction price of the domestic DMC market fell sharply this week, affected by the weakening procurement sentiment of downstream companies and the impact of the trade war on terminal exports. The inventory pressure of monomer companies gradually increased recently, and companies began to offer discounts to sell goods. The transaction price of the market fell sharply, and companies with high quotations basically had no orders. The phenomenon of offering discounts to sell goods was common, leading to an obvious phenomenon of apparent stability but actual decline in the market. Subsequent prices are expected to remain weak.

Silicone oil: The silicone oil market continued the trend of "volume-less decline" this week, with both prices and transactions under pressure. In terms of price, the mainstream quotations of producers dropped from 15,000-15,500 yuan/mt to 14,700-15,300 yuan/mt, with an average weekly decline of 250 yuan/mt, and the actual transaction price still retained room for negotiation. On the supply side, producers were forced to sell at reduced prices to recover funds, and some production plants had stopped production or were undergoing shutdown renovations to further reduce supply and alleviate the supply-demand imbalance. On the demand side, the export orders of terminal textile auxiliaries and daily chemicals were significantly affected, and market pessimism increased, so only some small orders were made for just-in-time procurement. In the short term, various imbalances are difficult to resolve, and the market will continue to cut production and clear out.

107 silicone rubber: The 107 silicone rubber market was deeply trapped in the dilemma of "price collapse and supply-demand imbalance" this week. The price dropped to 13,000-14,000 yuan/mt, with an average decline of 400 yuan/mt. The "volume discount" strategy of some producers failed to take effect, and the market fell into a vicious cycle of "the more the price drops, the less people buy". On the supply side, although the operating rate of top-tier enterprises was reduced, the overall inventory of the industry was relatively large, and it was still in a state of supply surplus. On the demand side, downstream customers still had a certain amount of inventory reserves, and the digestion cycle was prolonged due to the overall downward trend of the macro environment, so the willingness to purchase was not high, and the wait-and-see sentiment was strong, with market confidence almost at a freezing point. In the short term, without policy stimulus or strong support from the cost side, the price of 107 silicone rubber will further decline.

Silicone MVQ: The price of silicone MVQ was 13,800-14,600 yuan/mt this week, with an average price of 14,200 yuan/mt, down 450 yuan/mt WoW. This week, due to the decline in the price of DMC on the cost side and the decrease in the procurement volume of silicone product companies, the domestic MVQ price began to drop significantly. At the same time, the price of mixed rubber was also under great pressure recently, and the prices of products in the industry chain fell one after another, with further declines expected in the future.