Midstream and downstream clients' pre-holiday restocking gradually approaches its end, overall trading sentiment in the silicone market pulls back [SMM Silicone Weekly Review]

SMM February 5:

Cost side, East China #421 silicon (used in silicone) was at 10,000 yuan/mt on February 5, flat WoW, while East China #421 silicon was at 9,650 yuan/mt, also flat WoW. Spot silicon metal prices were mostly stable this week, with low-grade silicon prices rising 50-100 yuan/mt at the beginning of the week. Methyl chloride prices edged down WoW, with mainstream transactions at 1,900 yuan/mt. Overall costs decreased WoW, easing cost pressure for monomer producers.

DMC: Domestic silicone DMC prices remained largely stable this week, with the mainstream transaction range edging up to 13,800-14,000 yuan/mt, flat WoW. Regionally, monomer producers in Shandong quoted 13,800 yuan/mt, while other major producers quoted 14,000 yuan/mt. Overall market activity declined noticeably from the previous period, with new order performance average, mainly consisting of small, rigid-demand transactions. Demand side, amid weak end-use industry demand, downstream clients adopted a cautious procurement approach, primarily restocking based on immediate needs. Additionally, some mid- and downstream producers had completed stockpiling of raw materials required for post-holiday production resumptions in mid-to-late last month and have gradually entered the holiday period. Coupled with tightening logistics, the overall silicone market is gradually entering a semi-holiday state. Supply side, upstream monomer producers further adjusted their production pace based on the Chinese New Year holiday supply-demand pattern. Based on current enterprise production schedules, domestic silicone DMC supply is expected to continue declining in February, maintaining the previous pattern of reduced supply. Short-term, the domestic silicone market is gradually entering a holiday adjustment phase pre-holiday, with persistently sluggish market activity and phased contraction on both supply and demand sides. Therefore, domestic silicone DMC prices are expected to remain stable in the near term.

Silicone oil: Conventional viscosity prices for organic silicon dimethyl silicone oil were 15,200-15,800 yuan/mt this week, flat WoW. As end-use demand gradually weakened, downstream procurement sentiment cooled, with only small, rigid-demand restocking occurring.

107 silicone rubber: The market price range for conventional viscosity organic silicon 107 rubber was quoted at 14,200-14,800 yuan/mt this week, with an average price of 14,500 yuan/mt, flat WoW. Downstream clients have gradually begun holidays, production pace has slowed, and raw material consumption cycles have lengthened. However, considering post-holiday production resumptions, some clients maintain small, rigid-demand restocking.

MVQ: The MVQ price range was approximately 14,600-15,000 yuan/mt this week, with an average price of 14,800 yuan/mt, flat WoW. Supply side, affected by the continuation of emission reduction strategies, overall supply remained relatively tight. Influenced by recent pre-holiday restocking demand, monomer producers also had support from pre-sold orders, resulting in relatively small overall supply pressure. However, on the demand side, procurement sentiment slowed, with only small, rigid-demand restocking occurring.