1. Price fluctuations: DMC first fell and then rose, and silicone oil continued to be under pressure
From June 23 to 29, the silicone market showed a "two-sided" pattern. The price of DMC (dimethylcyclosiloxane mixture) in East China rebounded from the low of 10.3-12.3 yuan/kg on June 23, and some companies' quotations exceeded 12.8 yuan/kg on June 29, with a weekly increase of 5.8%. The price of first-grade DMC in Liaocheng City, Shandong Province rose from 11,300 yuan/ton to 11,500 yuan/ton, but the leading companies still maintained a high quotation of 13,500 yuan/ton, indicating that the market differentiation has intensified.

The dimethyl silicone oil market continued to be weak. On June 27, the transaction price of conventional viscosity products moved down to 13,000-13,700 yuan/ton, a decrease of 150 yuan/ton from the previous week. The rebound in the price of raw material DMC failed to be effectively transmitted, and coupled with the weak demand for downstream building sealants, silicone oil companies were forced to make concessions for promotions.

2. Supply and demand game: production cuts to support prices and inventory pressure coexist
Supply side: The bankruptcy and liquidation of a certain enterprise in Zhejiang caused a shock to the industry. Coupled with the concentrated production cuts of monomer plants in Jiangsu, Shandong and other places, the operating rate of the DMC industry dropped from 78% at the beginning of June to 65% on June 27. However, the release of cracking DMC capacity formed a hedge. On June 29, the price of cracking materials remained at 9,500-10,500 yuan/ton, 20%-25% lower than the original material.

Demand side: The downstream market showed structural differentiation. The demand in the photovoltaic field maintained a monthly growth rate of 15%, but the orders in the traditional construction and textile industries fell by 30% year-on-year. The market for organosilicon defoamers in Henan Province showed extreme differentiation. The price of Lianying Yuxi WT-305 products was as high as 6,100 yuan/ton, while Huiyihai's similar products were only sold at 2,800 yuan/ton, reflecting the survival difficulties of small and medium-sized enterprises.

3. Industry dynamics: Bankruptcy and capitalization go hand in hand
This week, the industry showed a polarized trend: on the one hand, a silicone enterprise in Zhejiang declared bankruptcy due to excessive debt, and another enterprise in Jiangsu failed to sell its assets, which attracted 6,000 people to watch; on the other hand, a company in Jiangsu with an annual revenue of 2.5 billion yuan started the listing process, indicating that the industry integration is accelerating. On the technical level, the Yangzhou Silicone Innovation Consortium was established, focusing on the research and development of high-end electronic-grade silicon materials, which may provide a new path for industry breakthroughs.

4. Outlook for the future market: Short-term rebound is difficult to change the long-term trend
Although DMC prices have rebounded technically, metal silicon prices have continued to fall, and the cost support of methyl chloride has weakened. Coupled with the arrival of the traditional off-season in July, the market generally expects that prices will fall back to the 11,000-11,500 yuan/ton range before mid-July. It is recommended to pay attention to the inventory turnover rate of leading enterprises and the new orders in the photovoltaic field, which will become a key indicator for judging the market trend in the third quarter.