Rising costs coupled with downstream rigid demand entering the market, short-term prices maintain a fluctuating trend [SMM Silicone Weekly Review]

SMM reported on July 3:

Cost: This week, the average price of #421 silicon (used in silicone) in east China was 10,000 yuan/mt, maintaining stability. The average price of #421 silicon in east China was 9,000 yuan/mt, with a price increase of 300 yuan/mt this week. Recently, the price of silicon metal has risen due to a narrowing supply and macro sentiment support, and it is expected to remain strong in the future. The price of monochlorosilane increased slightly this week, with mainstream market transactions at 1,900 yuan/mt. The comprehensive cost rose WoW, and the profits of monomer enterprises narrowed.

DMC: This week, the domestic DMC quotation ranged from 10,300 to 10,600 yuan/mt, maintaining stability WoW. This week, the DMC quotation of monomer enterprises in Shandong was 10,300 yuan/mt, with the price remaining stable. This week, the DMC quotation of other monomer enterprises in China ranged from 10,400 to 10,600 yuan/mt. This week, the domestic market price remained temporarily stable. After the entry of rigid demand in the early market, the transaction enthusiasm in the market this week has declined. In addition, there has been a significant increase in supply recently, and the market supply surplus has begun to emerge. However, the cost of silicone has risen recently, so the DMC price is expected to fluctuate rangebound in the near term.

Silicone oil: This week, the market for dimethyl silicone oil in silicone showed a weak and stable trend. In terms of price, the market price ranged from 13,000 to 13,600 yuan/mt, with a decrease of 50 yuan/mt WoW. In terms of supply, some facilities in east China and south-west China are currently operating at reduced loads, but the overall supply volume remains at a high level. However, the overall shipment situation of producers has not been ideal recently, and inventory continues to be under pressure. Some producers have adopted a strategy of overtly maintaining stable prices while secretly reducing them to facilitate shipments, leading to fierce market competition. In terms of demand, the demand from traditional sectors such as textiles and daily chemicals remains weak, resulting in insufficient market demand. Therefore, affected by oversupply, the dimethyl silicone oil market in silicone is expected to continue to be weak in the short term.

107 silicone rubber: This week, the market for 107 silicone rubber in silicone continued to exhibit a weak pattern. In terms of price, the price range of 107 silicone rubber with conventional viscosity narrowed to 11,000-11,700 yuan/mt this week, with a decrease of approximately 250 yuan/mt WoW, and there is still room for negotiation in actual transactions. In terms of cost, the DMC price remained the same as last week, providing weak support. In terms of supply, facilities in north China continued to operate at reduced loads, while facilities in east China and south-west China maintained normal operation, with sufficient overall supply. In terms of demand, downstream enterprises began to accumulate inventory and were cautious in purchasing raw materials, with weak purchasing enthusiasm. Currently, the overall market is still oversupplied, and there has been no substantial improvement in end-use demand. Market confidence is lacking in the subsequent period, and it is difficult to change the situation of sufficient supply and weak demand for 107 silicone rubber in the short term. The market will still face significant downward pressure.