Market Update

Last week, China's silicone market continued its weak consolidation trend. The mainstream price range of DMC (dimethylcyclosiloxane) fell to RMB 10,800-11,500/ton, with the actual average transaction price dropping to around RMB 10,700/ton, down approximately 3.6% week-on-week. Against a backdrop of weak fluctuations in raw material metal silicon and methanol prices, cost-side support remained limited. Meanwhile, downstream demand continued to be sluggish, resulting in a overall market characterized by weak supply and demand.

In-Depth Market Analysis

1. Price Trends

• DMC: Some monomer manufacturers offered discounts to clear inventory, transaction levels declined by RMB 200-300/ton

• Downstream Products: 107 rubber and raw rubber prices stabilized with localized declines of 2-3%, compounded rubber remained weak and stable

• Cost Side: Metal silicon fluctuated weakly (industrial grade quoted at RMB 13,300-13,600/ton), methanol edged lower (East China spot price RMB 2,600/ton)

2. Supply-Demand Situation

• Supply Side: Partial plant shutdowns for maintenance, industry operating rate fell to 68% (-2% WoW)

• Demand Side: Downstream procurement remained cautious, focusing on digesting existing inventories with limited new orders

• Inventory Status: Monomer plant inventory turnover days increased to 14 days compared to previous period

3. Market Outlook
Market analysts noted: "Short-term lack of supportive factors suggests DMC prices will fluctuate in the RMB 10,500-11,000/ton range, with downstream product prices following raw material movements."

Industry Impact

• Monomer Plants: Profit margins continued to narrow, some companies approached breakeven point

• Downstream Enterprises: Cost pressures slightly eased, but insufficient new orders constrained procurement willingness

• End Markets: Weak demand in construction, electronics and other industries transmitted to silicone consumption

Key Focus Areas:
✓ Whether traditional peak season demand in September will start as scheduled
✓ Demand growth in new energy, photovoltaic and other sectors
✓ Impact of raw material price trends on costs