Silicone Rubber and Silicon metal following opposite price trends in the market

The silicone rubber market moves upwards and onwards in the Chinese domestic market regardless of weakening trend of feedstocks in March 2022. Silicone rubber has been in strong demand in the domestic as well as international market. Silicone rubbers are highly versatile and are heavily employed in the healthcare and medical industry along with electrical & electronics and automotive industry.

Meanwhile, Silicone rubber feedstock market has been highly volatile in March where prices initially soared, however in the light of the resurgence of covid cases in China, feedstock market plunged quite rapidly. Dimethylcyclosiloxane (DMC) is the key component for producing Silicone rubber and Silicone oil. In the Chinese market, Silicone DMC prices have increased in the first couple of weeks and assessed at USD 6085 per MT on an FOB basis while the DMC market declined from mid-second week onwards and finally stabilized in the last week of March and settled at USD 5711 per MT on FOB basis.

Silicon metal has also followed a similar trend in China, where Silicon metal prices increased voraciously in the first two weeks however the declining market sentiment resulted in nosedive in Silicon metal prices. Silicone DMC prices have stabilized in the last week however similar trend has not been witnessed in Silicon metal prices. As of last week, of March, Silicon metal prices continue their sharp decline and were assessed at USD 3540-3460 per MT (Yuan 22480-21980 per MT).

Silicon metal has been in strong demand globally as Silicon metal has been widely used in semiconductor chip manufacturing and these cater to several critical industries including Automotive, electronics and other industries. In 2021, the world witnessed a severe shortage of semiconductor chip which is yet to ease out. Hence, procurements of Silicon metals have been a top priority for key economies of the world. This has resulted in Silicon metal prices gaining manyfold in the last year and a half. A similar trend has been observed for Silicone rubber where domestic demand coupled with global demand has been pushing the prices of Silicone rubber northwards.

As per ChemAnalyst, “Silicon metal along with Silicone rubber market is expected to remain firm in the coming weeks as lockdown in several cities of China have been removed which is likely to take demand to normal levels, increasing consumption of Silicone products in the market. Hence, it has been forecasted that Silicon and Silicone rubber prices are likely to gain in coming weeks.”