1. Supply side: regional maintenance and capacity increase and decrease intertwined
According to SMM statistics, the domestic silicone monomer operating capacity has shown regional differentiation characteristics in the past week. Some units in East China and North China have completed maintenance and resumed production, but the Northwest region has entered the annual maintenance cycle, and a certain 800,000-ton unit has been shut down for maintenance, resulting in a slight decline in the overall operating rate. This round of adjustments may be related to the law of industry cycles-after experiencing rapid capacity expansion in 2024, the growth rate of new capacity in 2025 has slowed down significantly, coupled with the strategy of rotating production of monomer plants, it is estimated that the maintenance capacity will account for about 20% of the total capacity, and the monthly output will be reduced by about 20,000 tons.

At the technical level, industry innovation continues to advance. Jiangshan Huashun Silicone has obtained a patent for a vulcanized silicone rubber mixing device, which solves the problem of low traditional mixing efficiency through the technology of roller rotation, reflecting that the company copes with cost pressure through process optimization.

2. Demand side: Emerging fields drive structural growth
Although demand in traditional fields is stable, emerging industries such as new energy, 5G, and ultra-high voltage have become the core driving force for silicone demand. The demand for room temperature glue and high temperature glue has increased significantly due to the sealing of photovoltaic modules and the bonding of new energy vehicle battery packs; the penetration rate of liquid glue and silicone resin in emerging application scenarios has increased, such as smart wearable devices and 3D printing materials. Hosun Silicon Industry clearly pointed out at the performance briefing that the expansion cycle of the silicone industry is nearing its end, the market supply and demand mismatch is gradually balanced, and emerging fields will drive the industry demand to maintain a high growth rate.

3. Market price: cost support and price support willingness are strengthened
The industry's profit recovery demand has driven prices to stabilize. In February 2025, leading companies such as Xin'an Chemical and Luxi Chemical raised the ex-factory price of DMC by 200-500 yuan/ton. As of February 26, the domestic DMC market price closed at 13,900 yuan/ton, up 9.88% from the beginning of the month. The current price support logic comes from two aspects: first, under the fluctuation of raw material electricity prices and silica costs, companies stabilize prices by reducing production and controlling quantity; second, the demand for high-performance products in emerging fields is growing, and structural shortages support the premium of high-end products.

4. Corporate Strategy: Vertical Extension and Horizontal Integration
Leading enterprises are accelerating their layout in high value-added fields. Hosun Silicon Industry is promoting the Xinjiang Photovoltaic Integrated Industrial Park and the Inner Mongolia Silicon Carbide Granule Project to strengthen the synergy of "industrial silicon-organic silicon-photovoltaic"; Huayi Group plans to acquire 60% of San Ai Fu's equity to improve the layout of the organic silicon industry chain. At the same time, Wanhua Chemical's Pakistan office was established, marking the acceleration of the globalization layout of the industry's leading enterprises.