The first week of July has seen a stable start in the chemical market. Under the guidance of the Shandong monomer factory, a key price indicator, the price of DMC (Dimethyl Cyclosiloxane Mixture) has remained largely stable this week. Meanwhile, the prices of silicone rubber and 107 adhesive have further narrowed the price gap with DMC, with quotes dropping by 200-500 RMB/ton in an effort to stimulate downstream stocking. However, following several rounds of price wars, the inventory levels of midstream and downstream companies are already relatively high, resulting in limited new order transactions this week. Currently, downstream enterprises do not show any significant demand for phased stocking, and cautious sentiment prevails as market participants are adopting a strategy of selling while closely observing upstream price changes.

In terms of costs, major factories in Xinjiang remain in a state of reduced production. With the arrival of the wet season in Southwest China, some silicon factories have resumed operations. Overall, the total supply volume this week has decreased compared to the same period last month, driven by the reduction in production from major factories in Xinjiang. However, whether supply will shift from reduction to increase hinges on the pace of复产in Xinjiang. Supported by the cost of industrial silicon and macroeconomic policies aimed at countering "involution," monomer factories are likely to continue maintaining stable pricing strategies.

Nevertheless, downstream demand remains uncertain, and the oversupply situation poses significant resistance to price rebounds. While cost support and favorable macroeconomic policies exist, market participants need to closely monitor changes in supply-demand dynamics and the复产pace of major factories in Xinjiang to navigate potential market fluctuations.

Market Analysis: This week marks a stable start in the DMC market, with prices of silicone rubber and 107 adhesive decreasing. However, limited demand for downstream stocking remains. Supply-demand dynamics continue to be a key factor influencing price trends, and market participants should proceed with caution.

Future Outlook: With the reduction in production from major factories in Xinjiang and the resumption of operations in silicon factories in Southwest China, the total supply volume is expected to adjust. Future market trends will depend on the balance between supply and demand, as well as the recovery of downstream demand.