Prices of Silicone Products Poised to Strengthen Marginally in the Short Term

SHANGHAI, Feb 17 —Prices of silicone products are poised to strengthen marginally in the short term and rise further once real estate demand boosts the market further.

On the demand side, the downstream buyers became cautious in purchasing silicone this week. Although the real estate market has bolstered market sentiment and demand, some downstream companies have remained sceptical in the face of the yanked prices of DMC and 107 silicone rubber. They refrained from purchasing this week now that they had completed building stocks.

DMC plants lifted their production this week. The DMC plants in east China began to resume operation from technical transformation. Those in north-west China gradually raised their production. DMC output is believed to have increased some 1,000 mt this week compared to last week.

On the raw material end, the SMM average price of #421 silicon (used in silicone) in east China rose 100 yuan/mt and stood at 19,200 yuan/mt on February 16. The prices of methyl chloride in Shandong fell 50 yuan/mt before rallying to 2,800 yuan/mt. Higher costs have prompted DMC plants to raise the prices.

The real estate sector has indeed boosted the demand for silicone products, but the price gains for DMC and 107 silicone rubber have dampened the demand. In this scenario, downstream producers turned cautious in purchasing, thus reducing the procurement volume of 107 silicone rubber this week. DMC plants also held the prices stable for a healthy market environment.