Weekly Brief of Silicone Market

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On Wednesday, the silicone market maintained a weak balanced supply-demand pattern. Discounts failed to boost sales, so monomer manufacturers in North China, Southwest China and other regions plan to expand equipment maintenance this week. The overall operating rate is expected to drop to around 60% to stabilize market sentiment. Though sellers have offered larger price cuts for transactions, the upcoming controller meeting in July will clarify production cut plans and coordinated price stabilization measures, showing strong industry willingness to prop up prices. Nevertheless, downstream end markets are in the traditional off-season. Midstream and downstream firms destock slowly with low purchasing enthusiasm. Only rigid replenishment occurs at month-end, which offers limited support to prices. In the short run, upstream and downstream players will stay on the sidelines to digest inventories, with slightly softer transaction prices. Market trends hinge on the July meeting outcome. Strong price-support signals may trigger concentrated rigid demand, staging a temporary market recovery amid tightened supply and rebounding demand. In contrast, if monomer plants slash prices to clear inventories under stock pressure, market sentiment will weaken further, dragging prices down. Overall, tight supply and sluggish demand keep counterbalancing each other. Actual transaction prices edge lower, and the market will trade within a narrow range.

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