Policy Core: Cancellation of Export Tax Rebates for Primary Form Polysiloxanes
On January 9, 2026, the Ministry of Finance and the State Taxation Administration jointly issued the "Announcement on Adjusting Export Tax Rebate Policies for Photovoltaic and Other Products," clarifying that from April 1, 2026, VAT export tax rebates for 249 products, including photovoltaics, pesticides, and organosilicon, will be cancelled. Among them, primary form polysiloxanes (basic raw materials for organosilicon) under tariff code 39100000 are included in the adjustment scope, with their 13% export tax rebate rate reduced to zero. This policy directly impacts the starting point of China's organosilicon industry chain, marking the industry's departure from the extensive growth model reliant on tax rebates and subsidies.

Industry Background: The Involution Dilemma Under Global Capacity Dominance
China is the world's largest producer of organosilicon, accounting for over 75% of global polysiloxane production capacity in 2024, with exports reaching 507,600 tons from January to November 2025. However, the industry has long been trapped in a cycle of "capacity expansion - price reduction - losses": From 2020 to 2024, the compound annual growth rate of production capacity reached 19.71%, but the price of organosilicon DMC plummeted from 60,000 yuan/ton in October 2021 to 11,000 yuan/ton in June 2025. The export tax rebate policy, which reduced enterprise costs and enhanced price competitiveness, indirectly exacerbated low-price competition, leading to a continuous compression of industry profits.

Policy Impact: Short-Term Pain and Long-Term Transformation Opportunities
Short-Term Impact: Increased Costs and Market Competition
After the cancellation of the tax rebate, taking 107 silicone rubber as an example, the export cost per ton will increase by approximately 1,600 yuan. Enterprises face the dilemma of "raising prices and losing market share" versus "maintaining profits." During the policy transition period (January-March 2026), the industry is expected to experience a "rush to export," coupled with the 30% production reduction self-discipline mechanism, driving prices upward in the first quarter. However, after the second quarter, rising export costs and overdrawn demand may trigger a price correction.
Long-term Guidance: Driving High-End Development and Globalization
The policy aims to guide resources towards high-value-added sectors, such as electronic-grade silicone oil and medical-grade organosilicon. Leading companies like Hoshine Silicon Industry, leveraging their integrated coal-power-silicon industrial chain and cost advantages, can absorb the impact and expand their market share; SMEs, on the other hand, need to accelerate their transformation, or they may exit the market. Globally, the withdrawal of production capacity by overseas companies like Dow provides opportunities for Chinese companies to fill the gaps in the high-end market, driving the industry's leap from "global factory" to "innovation center."