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The current situation in the 107 silicone rubber market is mainly reflected in the following three aspects:
1. Enhanced cost support: Sharp rise in DMC prices
. Influenced by the continuous upward trend in the silicon metal futures market, raw material DMC costs were pushed higher, leading to a sharp price increase. Currently, DMC prices stand at 10,600-11,000 yuan/mt, up about 350 yuan/mt. As a direct raw material for 107 silicone rubber, the sharp rise in DMC prices directly provided strong cost support, passively driving up 107 silicone rubber prices.
2. No substantial end-use demand support
. The terminal sector remains in the traditional off-season, with persistently weak demand. Both PV and construction, the two major demand drivers, showed synchronized declines. In the PV sector, according to SMM data, PV module production in June fell approximately 11.6% MoM, leading to an 11% synchronous contraction in 107 silicone rubber demand. In the construction sector, NBS data showed that from January to May, the construction area of real estate development enterprises reached 6.25 billion square meters, down 9.2% YoY, with a 28.8% MoM decline in May alone. This translated to a roughly 24% MoM drop in demand for 107 silicone rubber used in construction sealants. Overall market demand lacked substantial support, putting additional pressure on the 107 silicone rubber market.
3. Rational downstream procurement dominates
. Persistent weakness in end-use demand has led to slow destocking speed and inventory buildup among downstream enterprises. For instance, silicone sealant manufacturers saw finished product inventory turnover cycles extend to 15-20 days. Despite rising raw material prices, fundamentals showed no improvement, prompting downstream players to maintain procurement strategies focused on "low inventory, small batches, and high frequency", resulting in spot 107 silicone rubber transactions remaining primarily small-volume orders for rigid demand.
In summary, in the short term, if silicon metal prices continue to rise, they will provide strong support for DMC costs, leading to synchronous price adjustments. Therefore, driven by cost-side factors, 107 silicone rubber prices will also be pulled up accordingly.
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