The transaction center of some silicone products moved upward, and the industry is in a period of bottom recovery [SMM Silicone Weekly Review]

SMM News on May 22:

Cost: This week, the average price of #421 silicon (used in silicone) in east China was 10,800 yuan/mt, down 200 yuan/mt WoW. The average price of #421 silicon in east China was 9,500 yuan/mt, down 500 yuan/mt WoW. Domestic silicon metal producers significantly reduced their quotes this week. As futures prices fluctuated, spot quotes also declined. Some silicon metal producers faced pressure on their quotes. With inventory levels rising, overall spot market quotes trended downward this week. The price of monochlorosilane remained stable this week, oscillating within an overall range of around 2,100 yuan/mt. The comprehensive cost decreased WoW, and monomer enterprises saw a slight increase in profits.

DMC: This week, domestic DMC was quoted at 11,300-11,600 yuan/mt, with the average price remaining stable WoW. This week, the opening quote for DMC on the online mall of a monomer enterprise in Shandong was 11,300 yuan/mt, unchanged WoW. The DMC quote of a leading enterprise was 14,800 yuan/mt, temporarily remaining unchanged, but there were still concessions available. Other domestic monomer enterprises quoted DMC at 11,500-11,600 yuan/mt this week. The center of gravity for DMC transactions in the domestic market shifted slightly upward this week. With a slight recovery in foreign trade orders, the operating rates of downstream enterprises increased somewhat. This week, monomer enterprises' DMC shipments improved WoW, and overall inventory showed a downward trend.

Silicone Oil: The dimethyl silicone oil market continued to operate in the doldrums this week. In terms of prices, the market quotes for conventional viscosity were 14,000-14,500 yuan/mt, with some room for negotiation in actual transactions. On the demand side, after the adjustment of Sino-US tariff policies, market enthusiasm increased somewhat. However, downstream enterprises remained largely bearish on the overall market, leading to rational transactions and cautious procurement, mainly for just-in-time restocking. In terms of supply, affected by the prolonged market downturn and the lack of substantial improvement in end-use demand, operating rates remained low. However, due to the extended consumption cycle of downstream inventory, producers still faced inventory accumulation pressure. Additionally, from a cost perspective, the relatively stable DMC prices this week provided some support. Therefore, in the short term, the dimethyl silicone oil market is expected to continue operating in the doldrums.

107 Silicone Rubber: This week, the 107 silicone rubber market showed signs of sentiment recovery and rational transactions. In terms of prices, the market quotes were 11,800-12,700 yuan/mt, with no significant changes during the week, and some room for negotiation in actual transactions. Although the recent adjustment of Sino-US tariffs has increased the enthusiasm in the industry chain, the export dependency of 107 silicone rubber is low, and the benefits from tariff adjustments are limited. Its main demand still comes from the domestic market. Currently, the main domestic demand sectors, such as construction and PV industries, remain sluggish, with no signs of substantial improvement. Therefore, it is difficult to boost demand for 107 silicone rubber. Downstream producers are relatively cautious in procurement, still focusing on just-in-time procurement. On the supply side, although the operating rate of top-tier enterprises remained low recently, inventory pressure remained high due to weak downstream demand. Some producers resorted to selling goods at low prices to recoup funds, exacerbating bearish market sentiment. In the short term, the 107 silicone rubber market will continue to face challenges amidst the dual pressures of inventory and weak demand.

MVQ: This week, the price of silicone MVQ ranged from 12,900 to 13,500 yuan/mt, with an average price of 13,200 yuan/mt, representing a 50 yuan/mt increase from the previous week. This week, the operating rates of enterprises in the downstream high-temperature silicone rubber sector increased. Most downstream enterprises entered the market to purchase raw materials after their inventories ran low. Demand is expected to pick up with the approaching trade war window period. Additionally, there have been clear signals of a cost-side bottoming out recently. As a result, market transactions for MVQ increased this week, and low prices in the market began to rise slightly.