According to the International Energy Agency, global oil demand is expected to decrease by 1 million barrels per day (previously 1.1 million barrels) and supply will decrease by 3.7 million barrels per day (previously 3.9 million barrels) in 2026. After the resumption of navigation in the Strait of Hormuz in June, the supply increased by 4.1 million barrels per day, still 9.4 million barrels lower than before the war. The escalation of the US Iran situation may overturn the forecast of oversupply in 2027.
Silicone Market Weekly Report (July 6-12, 2026): Production cuts remain weak, bottom game continues
From the weekly trading situation of multiple individual enterprises, the core contradiction in the silicon market still lies in the price level: the deviation between offers and transactions has not converged, but has further expanded. The mainstream single unit factory's DMC public quotation is anchored at 14000 yuan/ton, while 107 rubber, raw rubber, and silicone oil are quoted at 14600 yuan, 14800 yuan, and 15500 yuan respectively. The DMC quotations of the three leading enterprises remain in the range of 13900-14700 yuan/ton, indicating that the price system is still stable on the surface.
However, the reference value of these numbers in actual market transactions is accelerating to weaken - having value but no market has become the norm, and some individual enterprises with high inventory continue to offer discounts in actual negotiations. Some transaction prices have fallen below 13000 yuan/ton, and core large account long-term orders have hit a low of 12XXX yuan/ton. The price difference of over a thousand yuan between the quoted price and the actual order essentially reflects that under the same price language, the buyer and seller's understanding of the current supply and demand relationship is no longer in the same dimension.
The biggest variable on the supply side last week was the further compression of industry operating rates. Most individual factories are implementing production reduction and emission reduction as planned, with some units in North China and Southwest China completely shut down, and some units in East China operating for about 10 days per month. The overall operating rate of the industry has fallen below 60%. Logically speaking, repairing the supply-demand imbalance through substantial supply contraction is one of the few effective chips currently held by sellers.
But the problem is that for this logic to hold true, the prerequisite is that the reduction in production is sufficient to change downstream expectations. From market feedback, most demand side enterprises are skeptical about the actual implementation effect of large-scale production cuts by individual factories. As long as such doubts exist, the support effect of production cuts on prices will be continuously hedged. More importantly, the contraction on the demand side is racing against the adjustment on the supply side - the traditional off-season effect in July and August combined with weak terminal orders. Some midstream and downstream enterprises would rather reduce their own operating load than enter the market in bulk at the current price to replenish inventory.
Looking beyond the short-term game, the current price stalemate is essentially a projection of the industry's old and new logic alternation at the micro level. In 2026, as the starting year of the 15th Five Year Plan, the silicone industry is shifting from the traditional "scale wins" path to a new competitive paradigm centered on quality, service, brand, and value innovation.
The coordinated development of upstream and downstream has been redefined as the key to breaking through the industry, and the trend of "good products+good brands" is guiding enterprises to return to the essence of operation. This transformation process is bound to be accompanied by pain - during the transitional period when the old production capacity pattern has not yet been clarified and the new value system has not yet been established, the reconstruction of the price system is only the first surface signal perceived. What truly determines the direction of the industry is whether differentiation and subdivision can form a feasible closed loop in each link of the industry chain.