In the second quarter of 2026, the price of DMC, the core raw material for organosilicon in China, continued to decline, ending the recovery trend of the first quarter, and the industry as a whole was under pressure. After reaching its annual high in April, DMC prices fluctuated downwards, with a significant drop in transaction volume in July. The industry fell into a weak pattern of low prices and low profits, and the market was cautious about the outlook for the second half of the year.
This round of price declines was mainly due to a reversal in the supply and demand pattern. The supply tightening effect brought about by previous plant maintenance faded, and many plants resumed production in the second quarter, significantly easing market supply. At the same time, demand from traditional downstream industries such as construction and daily chemicals remained weak, terminal operating rates were low, and immediate demand was insufficient. Coupled with insufficient export order growth, companies continued to accumulate inventory, generally resorting to price reductions to clear inventory, further depressing market prices. Most companies' profits were close to the cost line.
Looking ahead to the second half of 2026, the organosilicon market is unlikely to see a unilateral surge, and will generally maintain a low-level fluctuation and a moderate recovery trend. On the supply side, persistently low prices will force the elimination of small and inefficient production capacity, alleviating supply pressure and providing a bottom support for the market. On the demand side, the traditional peak season is approaching in the second half of the year, coupled with steady growth in demand from emerging fields such as photovoltaics and new energy, which will marginally improve demand. However, the overall loose supply and demand situation remains unchanged, and the support from methanol raw materials is weak, limiting the room for market recovery. The industry will show a weak recovery trend with a narrowing decline and a slight rebound during the peak season.