China's domestic silicone market maintained a steady-to-strong trend last week. Leading monomer producers in Shandong held offers firm at 12,300 yuan/ton, while most other manufacturers continued quote suspensions, keeping spot supply tight. Average transaction prices showed modest gains: DMC at 12,450 yuan/ton (↑50), 107 rubber at 13,550 yuan/ton (↑100), raw rubber at 13,450 yuan/ton (↑50), and silicone oil at 14,550 yuan/ton (↑150).

Key Price Drivers

1. Persistent Cost Pressure: Metallic silicon prices remain elevated, with monomer producers still facing cost-price inversions

2. Export Boost: Silicone export orders grew ~15% MoM thanks to tax rebate policies

Market Characteristics

• Quotes: More producers suspended quotes, with spot offers moving in narrow ranges

• Transactions: Primarily backfill orders, limited new deals

• Downstream:
  ✓ Silicone sealants/mixed rubber prices extended gains
  ✓ End-user orders dipped 5-8% MoM, raising caution

Outlook
The market is at a critical juncture:
✓ Upside: Strong cost support (metallic silicon 553# at 13,800-14,000 yuan/ton delivered East China)
✓ Downside: Slower-than-expected demand recovery
DMC prices are expected to fluctuate between 12,200-12,600 yuan/ton short-term. Key watchpoints:

1. August metallic silicon capacity releases

2. "Golden September" stocking schedules in construction/electronics

Industry Trends
▶ Competitive shift: From scale expansion to cost control (advantaging leaders)
▶ Policy impact: Capacity regulations + environmental scrutiny accelerating consolidation
▶ Price volatility: Likely to stabilize in H2 with narrower ranges

Data Snapshot