Entering May, the silicone industry may usher in a window period of temporary improvement in supply and demand. The current industry operating rate remains above 80% at a high level. However, due to the concentrated maintenance of leading enterprises in February and March, the monthly output is expected to be reduced by approximately 20,000 tons. Coupled with the slowdown in the pace of new capacity release, the pressure on the supply side has somewhat eased. On the demand side, the continuous release of demand in emerging fields such as photovoltaic and new energy vehicles has become the core driving force for the industry's recovery.
In the photovoltaic sector, with the global newly installed capacity exceeding 400GW, the demand for high-weather-resistant and high-transparency silicone packaging materials has seen explosive growth. It is expected that the orders of photovoltaic module enterprises will increase by 15% to 20% month-on-month in May. In the field of new energy vehicles, each vehicle uses an average of 3 to 5 kilograms of silicone materials. Coupled with the global sales exceeding 20 million units in 2024, the annual growth rate of demand for battery sealants, thermal conductive potting compounds, etc. remains stable at over 20%. In addition, the construction of 5G base stations and the expansion of data centers have driven a sharp increase in the demand for silicone insulating materials used in power devices and chip packaging, becoming a new growth point in the industry.
In terms of price, the market price of DMC has risen by 9.88% cumulatively since February and is expected to continue the rebound trend in May. On the one hand, the reduction in production by individual manufacturers and the acceleration of inventory reduction have driven the repair of market price differences. On the other hand, the recovery of overseas demand has driven export growth. The implementation of infrastructure projects in emerging markets such as Southeast Asia and the Middle East has led to a compound annual growth rate of over 20% in the export volume of silicone materials.
In terms of the industry landscape, leading enterprises consolidate their advantages through full industrial chain layout and technological breakthroughs. Relying on the "coal-electricity-silicon" integrated base in Xinjiang, Hesheng Silicon Industry has achieved a 100% self-sufficiency rate of industrial silicon, and the crystal yield of silicon carbide substrates has exceeded 95%. The intelligent production system has reduced the power consumption per ton to below 10,000 kilowatt-hours. As the industry's peak season approaches in May, the silicone industry may gradually emerge from the bottom and enter a new cycle of supply and demand rebalancing and value reshaping.
