For the Quarter Ending March 2024
North America
In Q1 2024, the Dimethylcyclosiloxane (DMC) pricing dynamics in the North America region were influenced by a range of factors beyond the conventional top three. Overall, the market situation was bullish, with low supply and high demand.
The supply of DMC was inadequate, leading to limited constraints on output and a decrease in production levels. However, there were no reported plant shutdowns during this period. The demand for DMC, particularly from the downstream Silicone Rubber and Polymer industries, remained high, contributing to the bullish trend.
The market in the USA experienced the most pronounced price fluctuations, with stable to slightly lower prices in January, followed by a increase in February and a rebound in March. The overall trend was influenced by factors such as limited supply, brisk demand, and trading fundamentals. The year-over-year price change in Q1 2024 was 10% higher compared to the same quarter last year, highlighting the volatility in the market. The price for DMC CPT USGC in the USA at the end of the quarter was USD 3230/MT.
APAC
In Q1 2024, prices of DMC in Shanghai-based factories continue to remain elevated compared to pre-holiday levels. Leading DMC plants refrained from releasing offers, prompting other suppliers to either increase prices or remain silent. In response to this situation, downstream buyers rushed to make purchases, driving up prices of silicon products. The increase in Silicone DMC prices can be attributed to two main factors. Firstly, downstream enterprises with a strong inclination towards production displayed robust demand. Secondly, adverse weather conditions caused delays in arrivals, leading to supply constraints. The price surge in silicone oil was fueled by low inventory levels and high costs. Additionally, the delayed start-up of new capacity has raised concerns about exacerbating oversupply risks. In China, the silicone DMC market has witnessed a general uptick. A prominent manufacturer in Xinjiang resumed trading, influencing other DMC companies that had halted orders to potentially raise prices to match those of the major manufacturer in Xinjiang. Furthermore, the raw material inventory acquired in the initial stages has started to deplete, prompting downstream companies to enter the market to replenish their stocks and facilitate transactions. Domestic DMC companies currently hold less inventory, and pre-settled orders are yet to be delivered.
Europe
During Q1 2024, the European Dimethylcyclosiloxane (DMC) market experienced a bullish price trend, with upward price trajectory observed in Germany. While the top three factors influencing pricing were supply, demand, and plant shutdowns, a nuanced analysis reveals additional insights. The overall trend in Germany showcased a brisk market situation, driven by a limited supply of DMC and strong demand from the downstream Liquid Silicone Rubber and personal care sectors. This resulted in higher price trend, with increase in trading and spot price discussions. However, the year-over-year price change for the same quarter last year indicated a 4% increase. The final quarter's price for DMC FD Hamburg in Germany stood at USD 3340/MT, indicating a relatively higher price compared to the previous months. The market witnessed strong demand driven by robust buying interest from converters and distributors, particularly for the production of Silicone Elastomers. This surge in demand coincided with a supply crunch in the vicinity, as limited trades were unable to keep pace with the rise in fresh orders.
For the Quarter Ending December 2023
North America
When compared with the previous quarter, the market fundamentals of Dimethylcyclosiloxane in the USA showcased an upward price trajectory in the wake of increase in market trading fundamentals and low-level product inventories among the significant manufacturing units. In Dec, the price of Dimethylcyclosiloxane in the USA was observed to be 3130/ton FOB USGC.
The cost support was given by robust spot market trades, higher production expenses, and an increase in market trade from the USA to other North American region. Distributors are nevertheless supported using domestic stocks and growing demand. Due to more solid offers, tighter supply for November 2023, and better buying demand, the FOB USGC DMC price increased. Because it was difficult for downstream players to sustain margin, buying was primarily done on the immediate basis.
For the downstream market, there was a sign of demand improvement and sources were heard strong views given brisken market from personal care and Silicone Elastomer market. With improving DMC demand in the domestic market prices show a slight upward trajectory.
Asia Pacific region
In the Asia Pacific region, the market trading fundamentals remain bearish in the affect of continuous decline in the market trend and low market offers from the buyer’s end. The supply of Silicone DMC in the region remains adequate with feeble demand recovery from the downstream enterprises. Limited prices support this month was attributed by gradual increase in exports from China to India. Chinese suppliers had declined their quotations in the hope to secure their profit margin and revenue. In December 2023, the downturn in the Silicone DMC market intensified, coinciding with a consumption off-season in the downstream sector of DMC. Persistent weakness in market demand prompted a gradual increase in on-site bidding activity. The overall transaction price approached a lower range, leading to a gradual narrowing of the price gap between high and low points in the market. Meanwhile, in the feedstock market, methanol prices showed an upward trend, but the lack of robust market trades negatively impacted the fundamentals of market trading.
Europe
The European DMC market witnessed a sluggish market purchase with deteriorating trading fundamentals from the downstream ventures. Higher production costs and an increase in market trade from Germany to other European regions provided the cost support with healthy spot market trades. Utilization of domestic inventories and rising demand continue to provide support for distributors. The FOB Hamburg DMC price surged, considering tighter supplies for Q4 2023 and improved buying demand amid an increase in firm offers. Buying was mainly on a need basis, as downstream players found it difficult to maintain margin. For the downstream market, there is a sign of demand improvement and sources were heard strong views about Nov 2023 outlook given brisken market from personal care and Silicone Elastomer market. With improving DMC demand in the domestic market prices show a slight upward trajectory. In Dec, the price of Dimethylcyclosiloxane in Germany was observed to be USD 3230/ton FOB Hamburg. Commodity demand remained strong, and after the October gain, producers began to tighten their holdings. The export market has also improved, with buyers being cautious in their negotiations with suppliers.
For the Quarter Ending September 2023
North America
The purchasing activities of Dimethylcyclosiloxane (DMC) started this quarter with sluggish demand fundamentals and low purchasing activities for fresh stocks. A healthy production rate and bearish downstream requirements slipped the product prices in the US market. In July 2023, a shortage of tank storage space led sellers to offer DMC at competitive prices. Exports of DMC from the USA to other North American and South American regions remain tumbled under the influence of slow market offtakes. However, during Aug 2023 and Sept 2023, an uptick in trading activities and rapid consumption of products from the end-user industries remain the primary reasons for the DMC price increment. In Aug 2023, the price of DMC in the USA surged to USD 3102/ton FOB USGC. Strong market sentiments and accelerating energy values further boost the price of DMC in the domestic market. The US DMC grappled with thinning operating rates and surging crude oil prices, surging the downstream ventures' profit. Exports from the US to Mexico and the South American market also surged with insufficient product availability. The downstream market also surged with surging demand from the end-user market.
Asia Pacific
This quarter started with weak market purchases along with limited market trades from the suppliers to buyers due to adequate stock levels among the enterprises. However, following a considerable rise in the domestic supply of DMC, the market began to display a distinct downward trend and entered a continuous low channel. With low trading activity, the price of DMC declined. Increasing stockpiles due to sluggish demand forced manufacturers to offer discounts on existing DMC shipments in order to clear their supplies. During Aug 2023, the price of DMC in China declined to USD 1940/ton FOB Shanghai. In Sept 2023, the DMC prices witnessed a downward correction due to higher production rates of significant enterprises from the past months, resulting in demand exceeding the supply. Shandong's significant factories actively raised the price of DMC due to high purchases and continuous inventory utilization. Supply in the region is considerably low, with rising purchasing activities in the domestic market.
Europe
This quarter, the price trend of DMC in Germany declined during July 2023 in the wake of limited product consumption from the downstream enterprises and operational cuts among the significant manufacturing units to avoid further stockpiles. Regional DMC prices in the European market rose, aided by a stronger buying interest and healthy product demand from the downstream ventures. The surge in spot trading disrupted the DMC availability, resulting in a price gain. In terms of the upstream market, elevated crude oil prices rise internationally, leading to increased production costs for petrochemicals, including DMC in Germany. During Sept, the price of DMC in Germany inclined to USD 3184/ton FOB Hamburg. Suppliers first quit providing lows, citing their easing stock pressure following aggressive sales. Shortly after, higher costs and thin margins on the producers' side paved the way for a rebound in the export market. Downstream Food and Beverage processing industries had observed a high purchasing activity with discernible signs of a demand recovery.
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
For the Quarter Ending December 2022
North America
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.
Asia
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.
Europe
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.
