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Recently, the DMC (Dimethyl Silicone Oil) market has experienced a price rebound, with weekly quotations stopping their decline and rising by 200-300 RMB/ton. Meanwhile, in the cross-border e-commerce sector, export prices for silicone products have surged, with some small-value silicone product packages seeing price increases of over 100%. These two market dynamics not only reflect changes in domestic DMC market supply and demand but also reveal the profound impact of international policies on the global market.
In recent times, DMC prices have stopped declining and rebounded, with weekly quotations rising by 200-300 RMB/ton. The supply of upstream raw materials remains sufficient, and most monomer companies continue to focus on "price for volume," while the operating capacity of leading companies remains at a relatively low level in recent years. In the silicone products sector, production is running well, but there has been a slight decline in the silicone sealant segment. After the DMC price drop, downstream companies have begun to take goods after the holiday, and small and medium-sized monomer factories continue to de-stock, with regional premium performance showing differentiation.
Affected by news of a major Xinjiang factory shutting down 800,000-ton capacity, the DMC spot market has started to stabilize, with short-term transaction price resistance levels expected at 11,500/12,000 RMB/ton. The market will closely monitor the production reduction efforts of the two major benchmark companies in Shandong and Xinjiang, which will have a significant impact on DMC price trends.
At the same time, export prices for silicone products in the cross-border e-commerce sector have surged, with some small-value silicone product packages seeing price increases of over 100%. This phenomenon is closely related to the recent US policy of canceling duty-free status for small parcels from China. According to CCTV Finance, from May 2, the US officially ended the duty-free policy for small parcels from China valued at under 800 USD, with all such parcels now subject to tariffs.
This policy change has had a significant impact on cross-border e-commerce platforms and consumers. According to a May 2 report in The Wall Street Journal, approximately 1.36 billion parcels entered the US in this manner in the 2024 fiscal year, with the majority coming from Chinese cross-border e-commerce platforms. Reuters reported that this move has forced some e-commerce platforms to restructure their logistics systems, raise product prices, and accelerate the construction of local warehouses in the US to avoid the direct impact of high tariffs.
Some foreign brands have stopped shipping to the US, while some small and medium-sized enterprises have even chosen to exit the US market. Bloomberg further noted that prices for some products on e-commerce platforms have increased by more than double, with users on social media platforms widely complaining about delayed shipments. Patrick, a researcher at the Cato Institute, stated in an interview with local media that this policy appears to be tough on China but is actually raising taxes on US consumers, "This means higher prices and slower logistics, with consumers footing the bill for this policy."
This policy change could result in combined annual losses of up to 47 billion USD for businesses and consumers, with low-income groups being the first to suffer. Additionally, this policy will place severe pressure on the US customs system, potentially leading to delays in customs clearance. An estimate from Oxford Economics suggests that if the US government wants to clear and tax all small parcels, it would need to allocate at least several billion USD in additional budget to expand the system and increase staff, or face the risk of nationwide port congestion.
For the domestic market, the rebound in DMC prices and the surge in export prices for silicone products in cross-border e-commerce reflect both changes in market supply and demand and the profound impact of international policies on the global market. In the future, the price trends in the DMC market will continue to be influenced by upstream raw material supply, production reduction efforts by companies, and changes in international policies.
The rebound in DMC prices and the surge in export prices for silicone products in cross-border e-commerce highlight the complex relationship between the domestic market and international policies. Whether it’s the supply and demand adjustments in the DMC market or the tariff policy changes faced by cross-border e-commerce, both present new challenges and opportunities for market participants. In the future, the market will closely monitor DMC price trends and further changes in cross-border e-commerce policies.
