The silicone market on Friday is still shrouded in a weak haze. Although individual factories have attempted to seek breakthroughs by adjusting their pricing strategies, the implicit price reduction cannot conceal cost pressures. This subtle balancing technique has not been able to break the wait-and-see deadlock of downstream enterprises. After experiencing the disappointment of bearish expectations in the early stage, downstream enterprises have become increasingly cautious in their procurement mentality. Coupled with the continued weakness of the end consumer market, the phenomenon of bidding and shipping among downstream enterprises has become more and more intense, showing obvious resistance to the current relatively high cost prices, and the overall purchasing willingness is sluggish.
In terms of individual factories, inventory is piling up like a mountain. Although some companies have temporarily eased their financial pressure through pre-sale orders, the overall weak market demand has made the process of destocking in the first half of the year particularly difficult. Under the dual pressure of reducing production to maintain price and exchanging price for quantity, the enthusiasm of downstream customers to build warehouses has not been effectively boosted. According to market feedback, after Wednesday's price adjustment, downstream markets responded coldly and almost no one actively responded. Individual factories had to return to the negotiation mode and seek more flexible ways of cooperation. Although the DMC market quotation remains in the range of 13900-14000 yuan/ton, the actual transaction price still fluctuates around 13500 yuan/ton, and the phenomenon of secret bidding occurs from time to time, which shows the intensity of market competition.
In terms of cost, industrial silicon, as an important raw material for organosilicon, also has an unfavorable market trend. On the supply side, although major northern factories are resuming production as planned, the overall increase in operating rates is limited, and other manufacturers have weak willingness to resume production, resulting in slow growth on the supply side. On the demand side, the production reduction plan of organic silicon monomer factories is gradually being implemented, and the demand expectation for industrial silicon is further lowered. The imbalance between supply and demand has led to increasing pressure on industrial silicon inventory, resulting in a slight decline in spot prices this week. Market trading has been sluggish, and market prices have fallen below the 10000 yuan mark, spreading pessimistic sentiment in the market.
Faced with the external impact that the "equivalent tariff" policy may bring, as well as the severe challenge of internal supply-demand imbalance, the road to raising prices in the silicone market is particularly difficult. Under the dual pressure of cost and inventory, individual factories need to consider how to effectively reduce inventory while also dealing with the cold response from downstream markets. Finding a balance between maintaining price stability and promoting sales has become an urgent problem to be solved. In the future, with the continuous changes in the market environment, whether the silicone industry can successfully withstand external shocks and achieve breakthroughs in adversity still depends on how enterprises can flexibly respond and the degree of market demand recovery.