At a difficult time when the price of silicone raw materials continues to fall, persisting is not only a test of the resilience of enterprises, but also a crucial choice to accumulate strength for the future of the industry. The current silicone market is in a period of deep adjustment, and the downward pressure on prices mainly stems from the mismatch between overcapacity and the growth rate of demand. Data shows that domestic silicone production capacity is expected to reach 3.5 million tons in 2025, with a compound annual growth rate of 5%. However, the demand growth in traditional downstream fields such as construction and electronics is sluggish. As a result, although the industry's operating rate remains above 62%, the price has dropped to a historical low. The quoted price of DMC is only 10,700-11,500 yuan per ton, with a price difference of only 3%.
However, the dawn of the industry has already emerged. A research report by CICC indicates that the supply and demand balance sheet is expected to be restored by 2025. The addition of 100,000 tons of DMC production capacity by leading enterprises such as Xingfa Group in Inner Mongolia will become a landmark event in industry consolidation. With the tightening of environmental protection policies and the accelerated elimination of backward technological production capacity, the industry concentration will further increase. What is more worthy of attention is that the demand from emerging fields is becoming the key to breaking the bottleneck. It is estimated that the compound annual growth rate of the demand for organosilicon polysiloxane in China will reach 13% from 2025 to 2030, and it will exceed 3.22 million tons in 2028. The demand for high-performance organosilicon materials in high-end application fields such as new energy and 5G communication is booming.
For those who persevere, the current period is the golden window of opportunity to cultivate their inner strength. Enterprises can reduce production costs through technological transformation, such as optimizing fluidized bed processes and enhancing the efficiency of catalytic systems. At the same time, it is accelerating the transformation towards high value-added products, focusing on niche fields such as specialty silicone oil and functional silane. Leading enterprises have taken the lead in action, expanding their market share through mergers and acquisitions, while small and medium-sized enterprises need to focus on regional markets and create differentiated competitive advantages. As industry experts have put it, "Overcapacity is the catalyst for industry reshuffling. Only enterprises that adhere to innovation-driven development can weather the cycle." This cold winter will eventually pass, and those enterprises that have persisted in technological upgrading and market deepening even in the darkest moments will surely experience explosive growth when the industry recovers.
