Yesterday, some organosilicon monomer manufacturers in Shandong Province further lowered their quotations for DMC (Dimethylcyclosiloxane Mixture) and D4 (Octamethylcyclotetrasiloxane), with a single-day drop of RMB 200 per ton. The latest quotation has fallen to RMB 11,300 per ton. Previously, such monomer manufacturers had achieved concentrated order receiving through low-price strategies. However, as market price competition intensified further this week, the bidding in their online transaction links continued to offer discounts, and they kept stimulating the stock-up willingness of downstream enterprises by virtue of price advantages.
Against this backdrop, other monomer manufacturers also quickly joined the order-seizing ranks and launched differentiated discount plans for core customers, immediately triggering a round of comprehensive discount craze in the market. From the current market feedback, the concentrated price cuts by monomer manufacturers have indeed effectively diverted some orders and alleviated the inventory pressure on the supply side to a certain extent. Nevertheless, after completing a round of stock-up at low prices, downstream and midstream enterprises quickly returned to a wait-and-see state. Faced with the current weak end-demand and the continuously narrowing profit margin, enterprises' confidence in bottom-fishing is obviously insufficient. There has been no large-scale stockpiling phenomenon in the market, and procurement activities are mostly centered on immediate rigid demand. Only a few enterprises have made a small amount of stock-up arrangements in combination with the expectation of the "Golden September" peak season.
In terms of supply and demand, the operating rate of monomer manufacturers has been gradually increasing since August, and the originally fragile market supply-demand balance has been easily broken, directly pushing the price war into an intense stage. In order to accurately catch the bottom of the market, most downstream and midstream enterprises have chosen to wait for a clear price stabilization signal before entering the market for procurement, resulting in a disconnection in the inventory undertaking rhythm between the upper, middle and lower reaches this week, and the risk of market price decline continues to accumulate.
For monomer manufacturers, they need to carefully balance inventory destocking and profit maintenance at present. Comprehensively considering the supply-demand pattern, enterprise mentality and price trend, it is expected that the actual transaction price of DMC will break through the RMB 11,000 per ton mark in the near future, and the market is still in a downward channel.