Downstream procurement reverted to sluggishness after the holiday, with local DMC transaction prices falling by 200 yuan/mt [SMM Analysis]

SMM News on May 9: According to SMM, the local transaction price of DMC in China fell to around 11,300 yuan/mt today, with the average price remaining unchanged from the beginning of the week. A monomer enterprise in Shandong Province quoted an opening price of 11,500 yuan/mt for DMC on its online mall today, a decrease of 200 yuan/mt from the previous quote. Today, some other monomer enterprises in China also slightly lowered their DMC quotes. As of now, the mainstream quotation in the market is around 11,500 yuan/mt, with the transaction price dropping to 11,300 yuan/mt. After the holiday, transactions among downstream enterprises have once again become sluggish.

Figure: Price Trend of Silicone Products

Today, some monomer enterprises in the market have started to lower their quotes. Although the mainstream DMC quotation remains at 11,500 yuan/mt, due to the recent decline in transaction enthusiasm, the DMC transaction price in some local markets has fallen to 11,200-11,300 yuan/mt. SMM has learned that the main reasons are as follows: Firstly, although the domestic demand side stocked up on purchases before the Labour Day holiday, transactions in the market have decreased after the holiday due to the generally lackluster performance of end-use demand. Secondly, some production lines of domestic monomer enterprises have recently resumed production. Although the maintenance plans of large factories in north-west China have significantly impacted capacity, the overall domestic supply has increased. As a result, monomer enterprises' inventories have started to come under pressure. Although there are still orders being taken at a DMC price of 11,500 yuan/mt, the high inventory level has not yet found a quick way to decline. Therefore, the transaction price in some local markets has slightly dipped, with the main focus on offering discounts to destock.