As the Chinese New Year holiday gradually approaches, the overall market trading performance remains stable [SMM Silicone Weekly Review].

SMM January 29:

Cost: 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. Spot silicon metal prices were mostly stable this week, with the price center of individual grades edging up slightly. Downstream enterprises conducted pre-holiday stockpiling on a just-in-time basis, and market trading activity 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: Domestic silicone DMC prices were mainly stable this week, 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, mid- 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 is 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 inventories, also conducted 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: Conventional viscosity prices in the organic silicone dimethyl silicone oil market were at 15,200-15,800 yuan/mt this week, flat WoW. As the holiday approaches, most downstream clients are gradually entering holiday preparation, and market transactions are mainly based on just-in-time stockpiling.

107 silicone rubber: The market price range for conventional viscosity organic silicone 107 rubber was quoted at 14,200-14,800 yuan/mt this week, 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 remain cautious about accepting high-priced supplies in the current market, pre-holiday stockpiling demand is being released. To ensure normal post-holiday production needs, just-in-time procurement remains the main approach, with overall transactions relatively stable, gradually digesting high prices.

MVQ: MVQ prices ranged around 14,600-15,000 yuan/mt this week, with an average price of 14,800 yuan/mt, flat WoW. Downstream mixed rubber enterprises' stockpiling pace mainly continued just-in-time procurement, with some clients having larger just-in-time volumes expected to have batch procurement needs 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 to some extent; under the impact of emission reductions, the supply from other producers has also decreased. Combined with the release of downstream stocking demand before the holiday, the overall supply of enterprises is currently in a relatively stable state.