Last week, China's silicone market extended its downward trend, with DMC (dimethylcyclosiloxane) mainstream offers falling to RMB 11,000-12,000/ton, while actual transaction prices dropped to RMB 11,100/ton, marking a weekly decline of approximately 8.7%. Against a backdrop of weak stability in metal silicon and fluctuating methanol prices, cost-side support remained limited. Meanwhile, inventory pressure from increased monomer plant operating rates has triggered a new wave of price cuts across the industry.

In-Depth Market Analysis

1. Price Trends

• DMC: Some monomer plants initiated price reductions of RMB 500-1,000/ton to stimulate purchases, driving market transaction levels lower.

• Downstream Products: 107 rubber, raw silicone rubber, and silicone oils followed with 3-5% declines, while compounded rubber prices remained weakly stable.

• Cost Side: Metal silicon held steady (industrial grade at RMB 13,500-13,800/ton), while methanol edged up (East China spot at RMB 2,650/ton).

2. Supply-Demand Dynamics

• Supply Side: Monomer plant operating rates rose to 72% (+5% WoW), with inventory turnover days exceeding 12 days.

• Demand Side: End-users pressed for lower prices, with insufficient order growth and strong bearish sentiment.

3. Market Outlook
Industry analysts noted: "Without significant demand recovery, DMC prices may test the RMB 10,500/ton threshold, with inventory reduction remaining the dominant strategy in the near term."

Industry Impact

• Downstream Enterprises: Cost pressures eased, but procurement willingness stayed weak, with most adopting "hand-to-mouth" purchasing.

• Monomer Plants: Profit margins continued to shrink, with some nearing breakeven levels.

Key Focus Areas:
✓ Potential implementation of August monomer plant maintenance plans
✓ Demand growth in new energy sectors (silicon-carbon anodes, PV adhesives)