Entering mid-September, the international crude oil market experienced a round of significant upward movement. Brent crude oil futures broke through the $100/barrel mark for the first time since late July, while WTI crude oil futures rose above $95/barrel in tandem, with both benchmarks at phased highs. According to reports from Shanghai Securities News, the escalation of mutual strikes between the U.S. and Iran was the direct trigger—U.S. Central Command stated it destroyed five Iranian oil tankers, while Iran's Islamic Revolutionary Guard Corps announced strikes on a U.S. military base in Jordan in response.

Oil Price Increases Transmit to Chemicals

As the source of the chemical industry chain, crude oil price increases exert direct cost transmission pressure on downstream products. According to reports from China Finance Network, WTI and Brent crude oil both posted weekly gains exceeding 8.5% in the second week of September. Against this backdrop, silicone DMC prices rose 3.01% month-on-month, rebounding 25.4% from their July low.

From a longer-term perspective, this increase is built on the foundation of prior deep industry adjustments. According to reports from Tonghuashun, industry gross margins were compressed to their limits in 2025. Entering 2026, with coordinated industry actions continuing to advance, average silicone prices in the first half rose 13% year-on-year to 14,400 RMB/ton, while domestic DMC output from January to May fell 10.5% year-on-year.

Supply Contraction and Cost Push in Resonance

On the supply side, the Hebei industry meeting on September 2 confirmed that the 50% emission-reduction target for September would remain at the same level as August, with the industry's overall operating rate maintained at a low level of around 60%, and most enterprises' orders booked through mid-to-late September. Meanwhile, methanol, one of the core raw materials for silicone, continued its strong upward trend. According to reports from Global Silicone Network, the main methanol contract on the Zhengzhou Commodity Exchange closed up 4.41% at 3,552 RMB/ton, with spot prices at ports and inland locations moving up across the board. The core driver of this rally stems from import supply-cut expectations triggered by escalating geopolitical conflict.

Market Landscape and Outlook

In terms of price performance, monomer plant quotations were raised for two consecutive days from September 9 to 10, with mainstream DMC quotations in the 14,700–14,900 RMB/ton range and factory inventories down 26.7% year-on-year. Institutional research reports note that the launch of "Golden September and Silver October" peak-season restocking, combined with new demand from the new national standard for food-grade silicone and silicone leather, is expected to open up further upside space for silicone prices.

However, downstream users' apprehension toward continuously rising raw material prices has increased somewhat, making actual order follow-through a key short-term variable. While cost pressures and supply contraction support prices, the degree of downstream acceptance and the level of actual transaction volume will determine the sustainability of this market rally.

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