Policy Core: Complete Cancellation of 13% Export Tax Rebate
On January 9, 2026, the Ministry of Finance and the State Taxation Administration jointly issued the "Announcement on Adjusting the Export Tax Rebate Policy for Photovoltaic and Other Products," clarifying that from April 1, 2026, the VAT export tax rebate for organosilicon products such as primary form polysiloxane (HS code 3910.0000) will be cancelled. This policy covers core products such as 107 silicone sealant, methyl silicone oil, and vinyl silicone oil, directly ending the industry's more than ten-year-long "tax rebate subsidy era." Based on the current market price of DMC (dimethylcyclosiloxane mixture) at 14,000 yuan/ton, the cancellation of the 13% tax rebate will increase export costs by approximately 1,820 yuan/ton, significantly compressing corporate profit margins.

Short-Term Impact: Export Rush and Price Game
During the policy buffer period (January-March), a "rush to export" phenomenon has already emerged in the industry. Leading companies like Hoshine Silicon Industry and Xin'an Chemical Industry are accelerating production, with some continuing operations during the Spring Festival to strive for overseas order deliveries before April. Data shows that domestic organosilicon exports increased by 15% month-on-month in January 2026, but this short-term boom is unlikely to last. After April, overseas customers may pressure for lower prices due to rising costs, and coupled with the over-consumption of demand from previous export rushes, the industry may face the risk of both volume and price declines. Currently, DMC prices have rebounded from 10,700 yuan/ton at the end of 2025 to 14,000 yuan/ton, but analysts warn that prices may fall back after the second quarter due to supply and demand imbalances.

Long-term Transformation: Forcing Industrial Upgrading and Structural Optimization Policy adjustments are essentially a catalyst to break the "low-price involution." China's organosilicon production capacity accounts for over 75% of the global total, but it has long relied on primary product exports, with the industry's average gross profit margin in 2025 at only 3.2%. With the cancellation of tax rebates, companies are forced to shift towards high value-added sectors: demand for specialty products such as electronic-grade silicone oil and medical-grade silicone is growing significantly, and leading companies can enhance their pricing power through technological upgrades; the trend of global production capacity concentrating in China remains unchanged, and the closure of UK factories by overseas companies such as Dow Chemical provides opportunities for Chinese companies to fill the gap in the high-end market. It is projected that by 2027, the industry's CR5 (market share of the top five companies) will increase from the current 68% to 75%, accelerating the exit of small and medium-sized enterprises.