I. Overall market trend: price differentiation and weak demand coexist
From June 30 to July 6, 2025, the silicone market showed a differentiated pattern of "upstream raw material fluctuations, midstream products under pressure, and downstream consumption sluggish". As the core raw material of silicone, industrial silicon has seen a linkage increase in futures and spot prices, but the prices of silicone intermediates and terminal products have continued to weaken, reflecting the trend of profit transfer from the industrial chain to the raw material end.
Industrial silicon market: supply disturbances drive prices up
Futures market: On June 30, the closing price of the main industrial silicon futures contract 2509 was 8060 yuan/ton, an increase of 2.94%, with a trading volume of 1.3773 million lots, and capital inflows drove market sentiment to be optimistic. On July 3, futures prices fluctuated weakly, with the main contract closing price of 8010 yuan/ton, but social inventory decreased by 10,000 tons to 552,000 tons month-on-month, indicating marginal improvement in supply and demand.
Spot market: The price of Tongyang 553# silicon in East China rose from 8400-8500 yuan/ton on June 30 to 8600-8800 yuan/ton on July 3, and the price of 421# silicon rose from 8600-9000 yuan/ton to 8900-9100 yuan/ton. The reduction of production by large factories in Xinjiang and the increase in demand for polysilicon are the main driving forces, but the resumption of production of silicon factories in Southwest China is expected to limit the increase.
Organic silicon product market: price decline and sluggish transaction
DMC (dimethylcyclosiloxane mixture): On July 5, the DMC quotation of monomer enterprises in Shandong Province was reduced by 400 yuan/ton to 11,000 yuan/ton, and the competitive transaction price fell to 10,800 yuan/ton. Some large customers still have preferential purchase prices, and the market transaction center of gravity continues to move downward.
Dimethyl silicone oil: As of July 4, the price of conventional viscosity products dropped to 12,600-13,400 yuan/ton, down 350 yuan/ton from last week. Manufacturers' order acceptance is not ideal, downstream price pressure sentiment is serious, and manufacturers' bargaining space is compressed.

2. Core driving factors: supply and demand game and cost transmission
1. Supply side: coexistence of raw material disturbance and capacity release
Industrial silicon supply: Xinjiang large factories reduce production, resulting in supply contraction, but the expectation of silicon factories resuming production in the southwest region has increased. On July 3, social inventory decreased by 10,000 tons month-on-month, showing a destocking trend.
Silicone supply: The weekly output of silicone enterprises decreased slightly month-on-month, but the output in July was expected to increase month-on-month, and the supply pressure has not decreased. For example, although the price of DMC market has fallen, some companies still maintain shipments through bidding promotions.
2. Demand side: differentiation between traditional off-season and emerging fields
Traditional demand: The operating rate of aluminum silicon alloy enterprises has weakened slightly due to the weak off-season orders, and the demand for industrial silicon is insufficient.
Emerging demand:
Polysilicon: The increase in demand drives the consumption of industrial silicon, but the end market of silicone (such as construction and electronics) is affected by the high temperature and rainy season, the construction progress slows down, and the demand is sluggish.
Defoamer: On July 6, the price range of silicone defoamer in Henan Province was 2200-7550 yuan/ton, and the price difference of products with different contents and brands was significant, reflecting the increased sensitivity of downstream market segments to cost performance.
3. Cost transmission: the squeeze effect of rising raw materials and falling product prices
The rise in industrial silicon prices increases the production cost of silicone, but the prices of products such as DMC and silicone oil continue to fall, resulting in the transfer of profits from the industrial chain to the raw material end. For example, on July 3, the price of 421# silicone for silicone reached 9600-10400 yuan/ton, while the price of DMC was only 10800 yuan/ton during the same period, and the profit space of single enterprises was compressed.

3. Future Outlook: Short-term weak operation, long-term focus on demand recovery
1. Short-term (1-2 weeks): mainly weak shock
Industrial silicon: Futures market technical indicators show strong short-term support (such as KDJ rise, MACD red column enlargement), but we need to pay attention to the resumption of production of Southwest Silicon Factory and the sustainability of polysilicon demand. If the supply-side disturbance weakens, prices may fall back.
Organic silicon products: DMC and silicone oil market transactions are sluggish, and downstream price pressure sentiment is strong. It is expected that prices will continue to run weak. Enterprises may stabilize market share through production cuts or promotions.
2. Medium- and long-term (1-3 months): Demand recovery may become a key variable
Traditional fields: After September, the construction and electronics industries will enter the peak season, and the demand for organic silicon is expected to pick up, but we need to be vigilant about the drag on demand caused by the slowdown in real estate investment growth.
Emerging fields: The demand for organic silicon materials in new energy vehicles, photovoltaics and other industries continues to grow. If the policy side increases support (such as subsidies and tax incentives), it may become a breakthrough point in the market.
3. Risk warning
Supply side: The resumption of production of Northwest and Southwest silicon factories exceeded expectations, and the release of new production capacity may aggravate oversupply.
Demand side: Changes in the start-up of polysilicon enterprises and fluctuations in macro-capital sentiment may affect market confidence.
Policy side: Policy changes such as environmental protection production restrictions and export tax rebate adjustments need to be closely monitored.