Dow Chemical to Increase Prices for Silicone Products in July

According to Dow’s announcement: After careful consideration and comprehensive assessment and accounting, Dow Chemical’s silicone business will implement price increases for the main products of Dow Chemical’s silicone high-performance construction business from July 20, 2023 or the date permitted by the contract. Based on different product lines and markets, the adjusted increase is 5-10% .

According to relevant sources, the price increase may be related to Dow Chemical’s plan to reduce production in July.

Looking back on the first half of 2023, the silicone market can be roughly divided into two stages: first rising and then falling. In late February, the highest price of DMC was maintained at 17,900 yuan/ton, and then continued to fall.
Since the second quarter of 2023, the price of DMC has continued to decline, and the price of DMC in an enterprise in Shandong was once as low as 13,700 yuan/ton; at the same time, the reduction and shutdown of domestic monomer factories has continued to increase . decreased significantly.
At the end of June, some enterprises resumed production, but the mainstream of the market is still production and delivery according to order. On the whole, the contradiction between supply and demand in the silicone market still exists, downstream demand continues to be weak, and there is no good news in the terminal field , so we can only look forward to a new turnaround in the third quarter. At the same time, the price of silicon metal at the raw material end fell again after a short-term rise caused by the news of the leading production reduction, which is difficult to support the strengthening of the organic silicon market.
In addition, affected by the continued decline in DMC prices, the valuation of the silicone sector in the A-share market continues to be in the historical bottom range. According to Choice data, as of the close on June 30, the sector index was at 1366.99 points, a cumulative decline of 12.9% this year.
In July, with the increase in output and the gradual delivery of market pre-sale orders, if the demand side does not improve much, it is expected that the DMC market will fluctuate and decline in July, and the decline will be limited.