Dimethylcyclosiloxane (DMC) Prices Continue to Walk a Slippery Slope in the US and Europe

Houston (USA): The Russia-Ukraine war and prolonged pressure of pandemic repercussions have been affecting market fundamentals for several commodities, including Dimethylcyclosiloxane (DMC), in the global market. European and the US economic activities have been hampered by the threat of budding recession, while rising qualms due to supply chain disruption and the rise of the pandemic in Asia have reduced the consumption of DMC from the downstream Silicon Oil manufacturers.

As per the data, DMC prices have fallen by more than 2% in Germany and the US during the month of November, and another fall of a similar scale was projected for December 2022. There were several factors affecting the demand dynamics of DMC from the domestic as well as international market. Ending 2022 was unfortunate for China, as the country experienced the worst hit of COVID. Furthermore, under the influence of demand dullness from the domestic market and a disturbed supply chain, a fall of around 1% was observed during the final week of December 2022.

As a consequent effect, DMC prices in the USA and Germany plummeted at the same time. However, key consumers have revealed that supplies are still not high enough to meet the current demand from the downstream Silicon Oil market. The fear of recession and seasonal destocking practices are making DMC prices sustain a downtrend, despite enough demand in the overseas market.

Industrial experts have predicted that the demand for DMC in the US from the downstream automotive industry may rise during the first quarter of 2023, despite the very low GDP growth predicted for the country. This demand is anticipated to take support from backlog orders, which have not been completed due to a raw material shortage. Furthermore, the GDP growth rate for Europe has been predicted to be negative, as it is severely affected by the Russo-Ukrainian war and the recession.

ChemAnalyst predicted that the prices of DMC are likely to rise during the month of January 2023 under the influence of an optimistic outlook for demand from the downstream automotive sector. Meanwhile, the anticipated shortage of the product due to the lunar holidays in China during the second half of the month may also influence the price trend of the product in the global market.