As downstream restocking demand was released before the holiday, overall market trading performance remained stable. [SMM Silicone Weekly Review]

SMM January 29:

Cost side, on January 29, #421 silicon (used in silicone) in east China was at 10,000 yuan/mt, flat WoW, while #421 silicon in east China was at 9,650 yuan/mt, flat WoW. This week, spot silicon metal prices were mostly stable, with the price center of individual grades edging up slightly. Downstream enterprises made pre-holiday stockpiling on a just-in-time basis, and market trading atmosphere remained moderate. Methyl chloride prices were flat WoW, with mainstream transactions at 2,000 yuan/mt, and overall costs were basically flat compared to last week.

DMC: This week, domestic silicone DMC prices were mainly stable, with the mainstream transaction range rising to 13,800-14,000 yuan/mt, flat WoW. In terms of regional offers, monomer enterprises in Shandong quoted 13,800 yuan/mt, while other mainstream monomer enterprises quoted 14,000 yuan/mt. As the Chinese New Year break approaches, demand side, midstream and downstream enterprises gradually entered the holiday phase, with some already starting to reduce production loads. However, to ensure normal post-holiday production resumptions, there was still phased just-in-time procurement for restocking. A small number of clients without Chinese New Year break plans, although still supported by certain raw material inventory, also made just-in-time procurement for restocking considering logistics suspensions during the holiday. Supply side, to reduce inventory accumulation risks due to demand contraction during the Chinese New Year break, monomer enterprises' production pace in February is expected to further adjust production loads and scale back production schedules based on the supply-demand pattern and holiday arrangements. Therefore, with both supply and demand showing phased contraction, pre-holiday domestic silicone DMC prices are expected to remain mainly stable.

Silicone oil: This week, conventional viscosity prices for organic silicon dimethyl silicone oil were in the range of 15,200-15,800 yuan/mt, flat WoW. As the holiday approaches, most downstream clients gradually entered holiday preparation, and market transactions were mainly just-in-time stockpiling.

107 silicone rubber: This week, the market price range for conventional viscosity organic silicon 107 rubber was quoted at 14,200-14,800 yuan/mt, with an average price of 14,500 yuan/mt. Cost side, raw material DMC prices remained stable, providing cost support for 107 rubber and keeping prices steady. Demand side, although downstream silicone sealant enterprises remained cautious about accepting high-priced supplies in the current market, pre-holiday stockpiling demand was released. To ensure normal post-holiday production needs, just-in-time procurement remained the main approach, with overall transactions relatively stable, gradually digesting high prices.

MVQ: This week, MVQ prices were in the range of about 14,600-15,000 yuan/mt, with an average price of 14,800 yuan/mt, flat WoW. Downstream mixed rubber enterprises' stockpiling pace mainly continued just-in-time needs, among which some clients with larger just-in-time volumes are expected to have batch procurement demand before the holiday to ensure post-holiday production resumptions. In terms of supply, leading producers are currently performing well in taking orders, and product delivery cycles have been extended accordingly; other producers have also seen a reduction in supply due to the impact of emission cuts. Coupled with the release of downstream stocking demand ahead of the holiday, the overall supply from enterprises is currently in a relatively stable state.