1. Market size continues to grow, and emerging fields drive demand
The global silicone market is experiencing structural expansion. In 2024, the global market size will reach US$20.21 billion, and the compound annual growth rate is expected to be 6.8% from 2024 to 2029. This growth is mainly driven by demand in emerging fields: the demand for battery sealing and thermal management materials in the new energy vehicle field has surged. In 2024, China's new energy vehicle production will increase by 35% year-on-year, driving the demand for silicone thermal conductive materials to grow by 20%; in the photovoltaic industry, the demand for monocrystalline PERC battery encapsulation glue will increase by an average of 18% per year, pushing the silicone sealant market size to exceed US$1.5 billion. In addition, the construction of 5G base stations has spawned demand for high-frequency and high-speed silicone. In 2024, the global market size of silicone materials for 5G base stations will reach US$830 million.

2. The capacity pattern is deeply reconstructed, and China's dominant position is consolidated
The global silicone capacity shows a trend of "rising in the east and falling in the west". By the end of 2024, China's organosilicon monomer production capacity will reach 3.44 million tons, accounting for 76% of the world's total production capacity, an increase of 23 percentage points from 2019. This change is due to multiple factors: European and American companies have closed 350,000 tons of production capacity due to rising environmental protection costs, while China has reduced costs through an integrated layout of "industrial silicon-monomer-deep processing", and the electricity price advantage in Xinjiang has made the monomer production cost 40% lower than that in Europe and the United States. At the same time, Chinese companies have made breakthroughs in catalyst research and development. The new copper-based catalyst developed by Hesheng Silicon Industry has increased the monomer synthesis efficiency by 15%, and the comprehensive utilization rate of by-products has reached 92%, close to the international leading level.

3. Structural contradictions are prominent, and there is still a gap in the high-end field
Despite the leading capacity scale, the market supply and demand mismatch problem is prominent. The overcapacity rate of mid- and low-end products reached 35%, and the DMC price fell 77% from the peak in 2021, resulting in the industry's average profit margin being compressed to below 5%. In contrast, the import dependence in the high-end field is still high: in 2024, high-end products such as medical-grade silicone catheters and high-temperature resistant silicone rubber for aerospace use accounted for 68% of China's imported silicone materials, and the unit price was 3-5 times higher than that of ordinary products. This structural contradiction is also reflected in the export data: in 2024, China's silicone exports increased by 12% year-on-year, but the average export price decreased by 8% year-on-year, reflecting the lagging increase in product added value.