Entering this Wednesday, the silicone market showed a strong upward trend. According to the latest news, some individual monomer factories in Shandong province raised their prices by 300 yuan/ton again yesterday, pushing the price of DMC (dimethyl cyclic siloxane) up to 13500 yuan/ton. Adding the shipping cost factor, this price is already close to the quotes of other individual factories, which significantly narrows the price difference of DMC.
From the supply side of the market, individual factories have adopted production reduction strategies, resulting in a significant decrease in DMC production last week. According to statistics, last week's DMC production was only 39800 tons, a decrease of 10000 tons compared to the same period in January. At present, facilities in Shandong, North China, and Central China are all operating at reduced loads, while facilities in Southwest and Northwest China are also included in the production reduction plan. If these production reduction plans can be smoothly implemented, the spot supply on the supply side will become tight and gradually have an impact on the market.

Although in the early stage of the second round of upward trend, midstream and downstream enterprises maintained a wait-and-see attitude and were resistant to accepting high priced orders, with the digestion of low-priced raw materials in the previous round, the order volume steadily increased, and the market is expected to once again stimulate the momentum of chasing up prices and stocking up. Individual factories strictly control supply and adjust prices in a timely manner based on downstream orders to stimulate market stocking sentiment.
Currently, there is a fierce game between supply and demand, but individual factories still have the upper hand with the support of production reduction strategies. Therefore, in the short term, DMC prices are expected to remain stable, with mainstream freight inclusive quotes remaining between 14000-14300 yuan/ton.
At the same time, the raw rubber market is also showing an upward trend. This week, leading rubber companies rose by 500 yuan/ton, with a quoted price of 15000 yuan/ton. Other rubber companies followed suit and raised their prices accordingly. Against the backdrop of orderly production reduction in upstream monomer units, the raw rubber unit has also implemented a production reduction layout. The stable orders for terminal silicon products and the steady improvement in demand have led to an increasing bullish sentiment among rubber mixing enterprises towards raw rubber.