Recently, the dynamics of the silicone market have attracted much attention, with news such as a significant drop in DMC prices, an improvement in the export situation of silicone oil, and layoffs by industry giants sparking market discussions.
From the perspective of price trends, the DMC market can be described as constantly falling. From a maximum of 60000+yuan/ton to the current 11000+yuan/ton, a decline of over 80%. Last week, the market continued to consolidate weakly, and the DMC price center further shifted downwards. At the beginning of the week, some companies were the first to lower their listing prices. On Thursday, benchmark companies in Shandong Province significantly increased their prices by 400 yuan/ton, lowering DMC quotes to 11000 yuan/ton, strengthening market bearish expectations. The current market is characterized by a "simultaneous contraction of quantity and price", with downstream enterprises showing low purchasing willingness and actual transactions mainly consisting of small and scattered orders.
In terms of raw materials, the overall market for silicon metal remains stable, with the price of 421 # silicon metal fluctuating between 8800-10700 yuan/ton, which has limited impact on the cost transmission of organic silicon. However, downstream product chain prices have generally declined, with 107 rubber quotations dropping to 12500-14500 yuan/ton, raw rubber prices falling to 12800-13500 yuan/ton, and mainstream silicone oil prices falling to 14500-15800 yuan/ton, reflecting continued weak terminal demand.
However, good news came from the export of silicone oil. In April, the export index of small and medium-sized enterprises was 50.4%, which remained in the expansion range for 13 consecutive months. In May, a functional silicone oil factory in East China saw a significant increase in export orders, with a year-on-year growth of 20%. This shows that the foreign trade market continues to improve under the driving force of technological innovation.
In terms of industry dynamics, US consumer goods giant Procter&Gamble announced plans to lay off 7000 employees over the next two years, accounting for approximately 15% of its global non manufacturing positions. The company will launch a two-year restructuring plan, including measures such as adjusting its business portfolio and optimizing its supply chain, with an estimated cost of between $1 billion and $1.6 billion.
From the perspective of supply and demand structure, the current market is facing multiple pressures. The operating rate of large-scale individual enterprises remains at around 70%, with sufficient supply on the supply side. However, traditional demand sectors have shown lackluster performance, and the growth of emerging sectors has not yet formed a scale substitution. In April, the overall export volume of organic silicon decreased by about 5% month on month.
Looking ahead to the future, the market will continue to operate weakly in the short term. Considering the traditional off-season for consumption in June and the lack of significant macro stimulus, it is expected that the benchmark enterprise DMC price may continue to test the key support level of 11000 yuan/ton. However, the current price has fallen below the cost line of most individual companies. If the price continues to decline, it is not ruled out that some companies may actively reduce production to balance supply and demand, bringing temporary stabilization opportunities to the market. Market participants need to closely monitor the dynamics of upstream equipment and changes in terminal demand, and flexibly adjust the procurement pace.