Short-Term Pain: Rising Costs and Intensified Market Competition
Effective April 1, 2026, China officially abolished the 13% export tax rebate on primary polysiloxanes (basic raw materials for organosilicon), directly increasing export costs for enterprises. Taking 107 silicone rubber as an example, based on current domestic market prices, the export cost per ton will increase by approximately 1,600 yuan, squeezing already thin profit margins. During the policy transition period, the industry experienced a surge in "rush exports," with companies releasing orders and accelerating delivery. Coupled with the previously agreed 30% production reduction self-discipline mechanism, organosilicon product prices are expected to fluctuate and rise in the first quarter of 2026. However, this short-term boom is unsustainable. After April, rising export costs will suppress overseas orders, and the "rush exports" will deplete demand, potentially leading to a rapid weakening of the market supply-demand relationship in the second quarter, with prices facing downward pressure.

Long-Term Leap Forward: Forcing Industrial Upgrading and Reshaping the Landscape
The new policy breaks the industry's vicious cycle of "low-price involution," driving resources towards high-value-added sectors. Over the past decade, China's share of global silicone production capacity has risen from 47% to 75%, but exports have primarily consisted of primary products, leading to a vicious cycle of price wars, overcapacity, and profit compression. Following the policy adjustment, leading companies such as Hoshine Silicon Industry and Xin'an Chemical Industry, leveraging their integrated supply chain and cost control capabilities, have absorbed cost pressures through internal profit adjustments and moderately raised prices based on their brand and channel advantages, consolidating their global market share. Small and medium-sized enterprises (SMEs) are accelerating their transformation towards high-end fields such as electronic-grade silicone oil and medical-grade silicone. Companies lacking technological advantages are either exiting the international market or turning to the domestic market, intensifying homogeneous competition. Industry concentration has further increased, and the global competitive landscape is becoming more optimized.

This policy adjustment marks a crucial turning point for China's silicone industry, shifting from "scale expansion" to "quality leap." Only companies deeply committed to high-end, differentiated, and globalized development can stand out in the global value chain restructuring.