SunSirs: Commodity Chemicals: The Silicone DMC Market Rebounds Slight by 1.59% On November 18

1. Price Trend

According to the data from SunSirs, up to November 18, the average price of the organic silicon DMC market in several mainstream areas under data monitoring is 17,033 RMB/ton, with an increase at 270 RMB/ton compared with last Thursday (November 14).

2. Market Analysis

Products: November is a traditional off-season month. There is no feasible improvement on both upstream and downstream of domestic silicone market. The silicone DMC market remained weak overall last week. Last Friday, in order to stimulate market demand, in the silicon DMC market, some manufacturers tried to raise their quotations, and some of their price has been raised by 300-500 RMB/ton. Dominated by the upstream, the market trend shows a oscillating upward. With the increase of downstream orders, the overall supply side of the market is relatively tight, and the amount of inventory is decreasing. This situation further improves merchants’ mentality. Till November 18, the price of offer has moved up by 300-500 RMB. The support of market becomes more stable, associated with the increase in export demand, there is a favorable market condition and the market price fluctuates upward when DMC is in short supply. As per SunSirs’ data base, the mainstream market price of silicone DMC manufacturing enterprises is 16,500-18,000 RMB/ton. The market transaction becomes slightly warmer. And the transaction price rises by 200 RMB/ton. However, some large orders are still settled down at around a cost price, with little profit margin left. Some downstream players keep cautious attitude. Their purchasing behavior closely depends on market dynamics. Therefore, it is possible that a gap will weaken the effect of upward price. Whether the price stimulation can be smoothly conducted to downstream, further stimulate demand and cost support needs attention.

Industry chain: Recently, the price trend of domestic silicone oil market has fluctuated slightly in a small range. The global economy is still in a depression, leading to a bleak demand for silicone oil within the industry. The domestic and foreign sales data are not ideal, and the terminal downstream is reluctant to purchase more goods and hold inventory at hand. At present, the price of imported silicone oil has remained stable. Due to general demand, agent shipments are also relatively light. The mainstream price of integrated imported methyl silicone oil is around 18,400-20,000 yuan/ton.

3. Market Forecasting

SunSirs’ analysts believe that the there will not be too much high-priced volume of the silicone settled down in the short term. After manufacturers pulling price up, if there is no demand to follow, it is difficult and impossible for market price to stay high.

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