During the golden decade of rapid development in China's organic silicon industry, industry dividends surged like tidal waves, benefiting the entire upstream and downstream supply chain. However, this period of prosperity temporarily obscured the hidden risks brought about by the blind expansion of homogeneous production capacity in recent years. As market growth slows down, industry competition has entered a white-hot stage, and some companies have finally been unable to withstand the pressure of price wars, actively exposing the reality of "internal price competition."

Market Dynamics:

Last week, the domestic organic silicon market continued its downward trend, with June DMC (Dimethyl Cyclosiloxane) prices falling for the tenth consecutive day. The transaction prices of key large accounts have approached the critical psychological threshold of 10,000 CNY/MT. Market monitoring shows that Shandong's benchmark factory significantly lowered its weekly quoted price by 900 CNY to 10,500 CNY/MT. Other monomer factories, although not publicly adjusting their prices, have generally followed suit by lowering the actual transaction prices for core clients by 200-300 CNY/MT, narrowing the mainstream transaction range to 10,500-11,000 CNY/MT.

Demand Restraints and Bottom-Playing:

Currently, downstream companies, influenced by the "buy-high, not-low" mindset, are still purchasing based on immediate needs. However, as prices gradually approach the bottom, some manufacturers have begun to plan inventory build-ups. Market feedback indicates that bulk order negotiations have significantly increased recently, with downstream customers waiting for a lower entry point. Industry analysis suggests that if DMC prices further decline to around 10,000 CNY/MT, it could trigger a phased surge in centralized restocking demand.

Significant Pressure on Downstream Price Drops:

The industry generally expects that the price gap among DMC companies will gradually narrow this week, while downstream products still have room for price reductions:

• 107 Adhesive: Quoted at 12,500-14,500 CNY/MT, with high-end prices under pressure;
• Raw Rubber: Quoted at 12,800-13,300 CNY/MT, with weak demand causing the negotiation focus to shift downwards;
• Silicone Oil: Domestic at 14,500-15,800 CNY/MT, imported at 18,500-19,500 CNY/MT, with the price gap continuing to widen;
• Crack Material DMC: Low-cost resources have dropped to 10,200-10,300 CNY/MT, impacting the new material market.

Weakening Support from Raw Materials:

Prices of upstream raw materials are also weakening:

• 421# Metallic Silicon: Quoted at 8,500-10,300 CNY/MT;
• Monochloromethane: Maintaining a low of 1,900-1,950 CNY/MT.

The cost support for organic silicon prices is further weakening.

Market Outlook:

In the short term, the market remains in a downward channel, but caution is needed against technical rebounds after oversold conditions. As prices approach historical lows, the release of downstream inventory build-up demand may provide a phased bottoming effect on the market. The subsequent focus should be on the capacity adjustments of leading companies and the dynamics of large-volume order transactions.