Prices of various downstream products of DMC decline, and the trading atmosphere in the silicone sector has cooled slightly recently [SMM Silicone Weekly Review]

SMM News on May 29:

Costs: This week, the average price of #421 silicon (used in silicone) in east China was 10,500 yuan/mt, down 300 yuan/mt WoW. The average price of #421 silicon in east China was 9,100 yuan/mt, down 400 yuan/mt WoW. Domestic silicon metal producers' quotations continued to decline this week. Recently, some monomer enterprises entered the market for procurement. Considering orders, silicon metal producers appropriately lowered their prices, coupled with a significant drop in futures prices, the support for spot prices was unstable, leading to a price decline. The price of monochlorosilane remained stable this week, oscillating around 2,100 yuan/mt. The overall cost decreased WoW, and monomer enterprises' profits slightly increased.

DMC: This week, domestic DMC quotations ranged from 11,400 to 11,600 yuan/mt, with the average price slightly increasing by 50 yuan/mt WoW. This week, the opening quotation for DMC on the online mall of a monomer enterprise in Shandong was 11,400 yuan/mt, up 100 yuan/mt WoW. Other domestic monomer enterprises' DMC quotations this week ranged from 11,500 to 11,600 yuan/mt. The center of trading in the domestic DMC market shifted slightly upward this week, but after a brief rise, the support for further increases was limited. Monomer enterprises focused on purchasing and destocking, with prices temporarily stagnant. However, the market trading atmosphere was generally sluggish recently, and downstream enterprises' procurement began to rationalize.

Silicone Oil: The dimethyl silicone oil market was in the doldrums this week. In terms of prices, the domestic dimethyl silicone oil market prices dropped to 13,600-14,200 yuan/mt, with the center of trading shifting downward by about 350 yuan/mt WoW. There was still room for negotiation in actual transactions. In terms of supply, producers were under significant pressure, with slow shipment rates leading to extended inventory cycles at production sites. Therefore, producers resorted to offering discounts to facilitate shipments. In terms of demand, it remained persistently weak. The substitution effect of cracked silicone oil and high-boiling silicone oil intensified in low and mid-end fields such as daily chemicals and textile auxiliaries, diverting market share. Other high-end fields still maintained just-in-time procurement, with a growing sentiment to drive down prices, mainly replenishing inventory on a small-order, as-needed basis. In the short term, under the dual pressure of destocking and substitution, the dimethyl silicone oil market will continue to be weak.

107 Silicone Rubber: The silicone 107 silicone rubber market was in a weak consolidation phase this week. In terms of prices, the market prices ranged from 11,800 to 12,500 yuan/mt, with the overall center of trading shifting downward WoW. In terms of supply, there was regional differentiation. Regions such as east China and north China faced less pressure, but some leading producers still had significant inventory pressure, adopting destocking strategies and offering discounts to facilitate shipments. In terms of demand, although it was near the month-end, triggering a small amount of just-in-time restocking, the overall market demand from downstream enterprises remained weak, with a sluggish trading atmosphere and no significant increase in orders to stimulate the consumption of 107 silicone rubber. In the short term, with a lack of momentum to break the deadlock on both the supply and demand sides of silicone 107 silicone rubber, the market will continue to be weak.