In the current complex and ever-changing market environment, the silicone industry is undergoing an unprecedented transformation. Recently, Elkem Group announced a strategic reduction in its silicone business, which quickly attracted widespread attention from the industry. At the same time, Dow Chemical's declining performance has cast a shadow over the entire industry.
The domestic DMC market price remains stable, with an average price of around 12650 yuan/ton. However, this does not mean that the market is calm. Most manufacturing companies keep their quotes unchanged, but the performance differences between inventory and pre-sale orders make it difficult for companies to find a balance between pricing and shipping. Today's market quotations and negotiation atmosphere remain stable overall, but the high inventory level in downstream markets has led most companies to maintain a wait-and-see attitude, and the transaction situation of new orders is not ideal.
On the raw material side, cost pressure remains high, and the silicon metal market maintains a weak and stable trend. The supply side is under short-term pressure due to maintenance of local individual units. On the demand side, the market atmosphere is flat in the short term, lacking obvious positive factors to stimulate.
In this context, the strategic adjustment of Eken Group is particularly noteworthy. The "Silicone" department affected by this restructuring provides a comprehensive range of silicone products, serving multiple fields including energy, cosmetics, electronics, aerospace, automotive, health, and construction. However, despite the department's operating profit being 2% higher than in 2023 and an increase of approximately 800 million Norwegian kroner in EBITDA, the group still made the decision to reduce its silicone business.
The group explained that this decision was influenced by a combination of multiple factors, including constantly changing market conditions, competitive landscape, and strategic priorities of business departments. Especially in the Chinese market, the continuous decline in the real estate market since 2021 has led to overcapacity, which in turn has affected the demand for construction products and put pressure on sales prices. Therefore, Eken is actively researching various options, including selling its silicone division, to address current market challenges.
