Silicone DMC Trading Center Declines Further, Bearish Market Sentiment Continues to Intensify [SMM Silicone Weekly Review]

SMM June 25 News:

Cost: On June 25, the average price of #421 silicon (used in silicone) in east China was 9,600 yuan/mt, unchanged from the previous session, and the average price of #421 silicon in east China was 9,400 yuan/mt, also unchanged from the previous session. Silicon enterprises in Sichuan and Yunnan raised operating rates during the rainy season, and the increase in supply put the silicon metal market under pressure, with prices stagnant and weak. Methyl chloride prices fell by 200 yuan/mt WoW, with the market average at around 2,600 yuan/mt, and the comprehensive production costs of silicone monomer enterprises decreased WoW, slightly weakening overall cost support.

DMC: This week, the transaction center of domestic silicone DMC continued to move lower, with the transaction range at 13,800-14,200 yuan/mt and an average price of 14,000 yuan/mt, down 150 yuan/mt WoW. On the demand side, affected by falling prices and slow shipments of finished products, bearish sentiment was strong in the market, with only small-volume rigid-demand deals concluded. Although month-end was approaching, the willingness to restock in bulk was weak as the market trend remained uncertain. On the supply side, due to varying circumstances among monomer enterprises, the implementation of production cuts diverged. Most monomer enterprises halted production or reduced operating rates, or entered annual maintenance; a few were running at reduced loads, resulting in an overall supply contraction. However, demand was a significant drag, with downstream users adopting a strong wait-and-see attitude and lacking enthusiasm in purchasing, causing inventory pressure to gradually emerge for some monomer enterprises. To stimulate new orders and ease inventory pressure, some enterprises offered small discounts in exchange for volume. In the near term, amid the tug-of-war between inventory pressure and sluggish demand, DMC prices are expected to remain weak. Attention should still be paid to the recovery of downstream demand and the coordination of industry meetings.

Silicone oil: This week, the market price of conventional viscosity dimethyl silicone oil remained broadly stable, with the transaction range at 15,700-16,500 yuan/mt and an average price of 16,100 yuan/mt, unchanged WoW. The supply side contracted overall, as small and medium-sized silicone oil enterprises continued to suspend production, reduce operating rates, and digest inventories, while integrated enterprises also lowered operating rates due to sluggish shipments. The demand side remained weak, with insufficient downstream end-user orders, and the market was cautious and on the sidelines overall, with deals supported only by rigid demand. Coupled with falling prices of DMC and siloxane raw materials, cost support for silicone oil continued to weaken, and downstream sentiment for pushing down prices intensified. Dimethyl silicone oil prices are expected to continue with a weak consolidation trend in the near term.

107 silicone rubber: This week, the transaction range for conventional viscosity 107 silicone rubber was 14,300-14,400 yuan/mt, with an average price of 14,350 yuan/mt. Affected by the continued decline in the DMC transaction center, cost support weakened further, and downstream silicone sealant enterprises showed a significantly stronger desire to push for lower prices in procurement. Overall sluggish demand led to slow destocking of downstream raw material inventories, and purchases were mainly driven by rigid demand. In the short term, under the dual pressure of weakening costs and sluggish demand, 107 silicone rubber prices will fall under pressure.

MVQ: This week, MVQ market prices broke the stability of the past month and saw a wide-ranging retreat, with the transaction range at 14,500-15,000 yuan/mt and an average price of 14,750 yuan/mt, down 450 yuan/mt WoW. Top-tier players sharply lowered prices, triggering other monomer enterprises to follow suit under pressure, which intensified bearish sentiment in the overall market, while downstream expectations continued to weaken. Demand side, end-use demand remains sluggish, compounding enterprises' shipments are under pressure, and they also show cautious wait-and-see attitudes toward purchasing new raw materials, making only small purchases for rigid demand, with no centralized stockpiling plan for now.