For the Quarter Ending June 2023
North America
In Q2 2023, the Dimethylcyclosiloxane market slumped, with limited trade and purchasing activities in the region. When compared with the previous quarter, the prices followed a declining trajectory with adequate stocks among the significant producing units. In June 2023, the price of Dimethylcyclosiloxane in the US declined to USD 3045/ton FOB USGC. Major DMC producers reduce their production rate due to lull demand and to avoid oversupplies. Exports of DMC from the USA to the South American market declined with fewer trading fundamentals discussions among the suppliers. Hoping to provide potential build-up inventories, suppliers also offered discounts on bulk purchases. Purchasing volumes are low, even with sellers reducing prices this quarter. The demand for DMC from downstream personal care industries remains at the lower end, with cautiously operating downstream ventures as per the consumer’s demand. The demand for the material was considered to be declining over a period of this quarter in lieu of curtailed activities in the end-use market.
Asia Pacific region
When compared with the previous quarter, the Dimethylcyclosiloxane market was affected by low trade volume and high inventory levels among the significant manufacturing units. In China, the price of Dimethylcyclosiloxane during May 2023 declined to USD 2249/ton FOB Shanghai. A reduction in utility costs and an increase in supply led to a decline in the price of DMC. The trading fundamentals, along with lower market trades, forced the producers to reduce the price trend along with limited product consumption. The Dragon Boat Festival in June 2023 also dampened the trading situation, which resulted in a sluggish market outlook. Despite stabilization in downstream Silicone Rubber enterprises, the demand for DMC threshold with lower product consumption and weak market outlook. Still, offerings are brought down by lower DMC futures, and the downstream stock stays tepid. DMC producers remain skeptical about raising their spot offers due to a slump in demand and adequate product inventories. There were limited offers of DMC from the downstream personal care and cosmetic enterprises, with the supply exceeding the demand.
Europe
In Q2 2023, the market trading fundamentals of Dimethylcyclosiloxane were lackluster, with low purchasing activities and deterred market fundamentals. An unpromising demand outlook has shaped the DMC outlook as falling consumption amid economic woes outweighed lower resin output. Recession fears surrounding regional commodity markets coupled with ease in energy costs have dimmed activity across many markets. DMC markets are still witnessing softening prices and tepid market fundamentals. In June 2023, the price of Dimethylcyclosiloxane in Germany declined to USD 3090/ton FOB Hamburg. DMC futures were more volatile this quarter as bearish demand for downstream adhesives and disinfectants drove the market lower. In the European region, the DMC price remains lackluster, with lower spot price discussions and piling up inventory levels. The price of the material continued to drop this quarter on the back of consistently declining consumption of the material from the downstream market in the country. On the other hand, the availability of the material remained sufficient to cater to depreciating bulk inquiries in the region narrowing the gap between demand and supply.
For the Quarter Ending March 2023
North America
The North American market kept on facing frequent market shifts and regular price revisions due to low demand in the global market and pessimism related to the economic momentum of the country, exacerbated by the collapse of two major banks. However, the US Dimethylcyclosiloxane prices rose in February due to firmness in demand from the downstream industry, driven by recent optimism in the market that the FED might stop raising their interest rate further. Supply remained overall firm from domestic producers, with no notable disturbances in the supply chain, although heavy snowfall caused some blockages. Economic momentum remained lower than anticipated.
Asia
The price of Dimethylcyclosiloxane fell steeply during March 2023 in both Indian and Chinese markets due to decreased demand and increased production activities. Chinese producers had stockpiled the product under the expectation of improved demand, but it did not come to fruition, leading to an oversupply in the market. The low demand from downstream procurers and decreased overseas demand contributed to the price decline. The imports from China were cheaper than domestic production in India due to the surplus product. Overall, the global DMC market has been affected by low demand and ample supply, resulting in a significant fall in prices. However, this trend may change in the future if the demand from the downstream industry increases or if there is a supply shortage due to production disruptions or other factors.
Europe
The European market experienced a decline in Dimethylcyclosiloxane prices during March 2023 due to uncertain market fundamentals and moderate to low demand caused by the long-term impact of war. However, the reduced risk of an economic recession created optimism for future demand. Despite unchanged demand, DMC prices rebounded in February due to an unexpected expansion in demand, despite the ease in energy prices and high inflationary pressure. Demand from the international market also rose, supporting the rise in prices, and expensive energy prices supported the upward price trend. A similar rebound was observed in the first month of the year due to an unexpected improvement in demand, which supported the rise in prices, along with expensive energy prices
The US DMC market remained underwhelmed during this quarter owing to low demand from the domestic downstream sectors amidst the abundance of the product in the country. Downstream industries' performance outlook stood upon expectations and remained dull throughout this timeframe. However, optimism regarding future months' performance of the Asian market coupled with the European energy crisis is projecting export prices to rise in the coming quarter. Supplies from the major manufacturers remained firm, while key players heard opting for supply cuts in order to control product availability across the country. Furthermore, profit margins fell for major key players due to a consistent rise in production costs. Additionally, the marginal effect of the polar storm was observed on the DMC market during previous months. Demand dynamics for the product from the downstream industries remained resilient during this timeframe, while other chemical commodities have also heard a demand slump in the meantime. However, rising market disturbances in China is influencing demand shift and prompting price increment in the near future in the US market.
Asian market witnessed a falling price trend for DMC during this quarter owing to rising availability in the region amidst low demand from the domestic market. As per the data, DMC prices in China witnessed a sharp decline under the influence of improved availability in the market and a pessimistic demand outlook. Furthermore, domestic consumption remained low due to reduced consumption from downstream industries after an escalation in COVID cases. Furthermore, domestic trade activities also remained dented due to lockdown restrictions, which led to stockpiled inventories.
Year-end destocking and easing upstream and energy costs in the European region eased DMC prices in Germany throughout the 4th quarter of 2022. Further, falling prices in the overseas market also supported this price downtrend in Europe. Germany experienced an average supply scenario. As a result, an unhindered supply situation and improved domestic as well as international supply chain activities. Furthermore, supplies from major producers like USA and China have also improved, supporting this price trend. Despite easing inflation rates in the country, the looming recession has been weakening the buying sentiment in the downstream cosmetic sector and creating a weak demand situation for DMC in Germany.
