1. Capacity scale and expansion trend
In recent years, China's silicone industry has experienced a period of rapid expansion. From 2019 to 2024, the production capacity of silicone intermediates increased from 1.52 million tons to 3.44 million tons, with an average annual compound growth rate of 17.8%. In 2024, the peak of concentrated capacity will be reached, with an additional capacity of 720,000 tons and a year-on-year increase of 26.5%. However, the expansion cycle is nearing its end, and only Inner Mongolia Xingfa's planned capacity of 100,000 tons/year has not yet been implemented.

2. Competition pattern
The industry's capacity continues to concentrate on leading companies, and companies such as Hesheng Silicon Industry, Bluestar Spark, Dongyue Silicon Materials, and Xin'an Chemicals occupy a dominant position in the market. In 2024, the industry's capacity concentration CR4 reached 54.65%, forming a "one super and many strong" pattern. As the industry's competitive environment gradually becomes orderly, the future market pattern is expected to stabilize further.

3. Market demand
Due to its excellent performance, silicone is widely used in traditional fields such as architectural decoration, textile manufacturing, medical care, and emerging fields such as photovoltaics, new energy vehicles, and electronic appliances. From the perspective of domestic demand, from 2019 to 2024, China's apparent consumption of silicone increased from 1.062 million tons to 1.816 million tons, with an average annual compound growth rate of 11.3%. The demand in emerging fields has grown significantly. In 2025, the consumption of silicone in the electronic and electrical field is expected to increase by 16.7% year-on-year, the photovoltaic field by 19.4% year-on-year, and the new energy vehicle field by 44.2% year-on-year. From the perspective of external demand, China's cumulative exports of polysiloxanes will reach 546,000 tons in 2024, a year-on-year increase of 34.2%, and emerging economies will become an important driving force for export growth.

4.Future Outlook
With the end of the expansion cycle and the rise of demand in emerging fields, the supply and demand pattern of the silicone industry is expected to gradually improve. In terms of supply, the future new production capacity will be limited, and the supply pressure in the industry will gradually ease. It is expected that from 2025, the imbalance between supply and demand in the silicone industry will be adjusted, and the industry is expected to form a supply and demand gap of -0.9 million tons and -11.2 million tons from 2025 to 2026. In the future, the silicone industry will play an important role in new energy, electronics and electrical appliances, medical health and other fields, and usher in new development opportunities.