Selective quotation suspension has emerged, with an upward trend in the silicone market on the horizon! The industry’s emission reduction initiatives are advancing steadily, and the operating rate of DMC has dropped to around 65% this month. As emission reduction policies are progressively implemented, the supply-side support is further strengthened.
Driven by these factors, some monomer manufacturers in Shandong suspended quotations yesterday, sending clear bullish signals and further boosting the market’s optimistic sentiment. Faced with the definite prospect of supply contraction and price increases, to avoid the risk of a substantial cost surge in the future, midstream and downstream enterprises are expected to launch inquiries one after another in advance to lock in raw material orders. Market trading volume is likely to rebound accordingly, facilitating the rebalancing of the industry’s supply and demand dynamics.
Overall, downstream demand has not yet seen a substantive improvement. If the prices of end products fail to rise in tandem, the capacity of midstream and downstream enterprises to absorb high-priced raw materials on a sustained basis will be constrained. Based on this judgment, it is expected that the silicone market prices will maintain a firm operation trend in the subsequent period. However, the room and sustainability for price increases still hinge on the actual follow-up of downstream orders. Monomer manufacturers will probably prioritize price stability, coupled with moderate marginal increases, to drive the market toward the third round of upward movement.