Industry Prices Rebound Significantly, Corporate Profitability Improves Drastically
The organosilicon industry saw a significant recovery in the first quarter of 2026. Taking Dongyue Silicon Materials as an example, its net profit attributable to shareholders in the first quarter is expected to reach RMB 183 million to RMB 203 million, representing a year-on-year increase of up to 451.34%, while its net profit excluding non-recurring items increased by up to 475.14% year-on-year. This performance surge is mainly attributed to the improved supply and demand dynamics in the industry. Prices of major organosilicon products have been rising continuously since December 2025 and have returned to a reasonable range, leading to a significant improvement in corporate gross profit margins. Furthermore, leading companies have further enhanced their profitability through refined management and internal optimization.

Capacity Expansion Slows Down, Industry Concentration Increases
Global organosilicon capacity continues to shift to China, with China accounting for 77.33% of the total capacity in 2025. However, the pace of domestic capacity expansion has slowed significantly. There is no new capacity release in 2025, and no new plans for 2026, with only Xinjiang Qiya Group's 450,000-ton monomer project commencing production in 2027. Meanwhile, the industry's anti-involution mechanism has gradually been implemented, with companies effectively stabilizing market prices through measures such as "dynamic price anchoring" and "demand cycle-linked production cuts." For example, the industry conference in November 2025 reached a target of reducing production by 30% and raising prices to 13,500 yuan/ton, driving DMC prices up from 11,000 yuan/ton in early November to 13,000 yuan/ton in late November, increasing the industry's average gross profit to 1,209 yuan/ton.

Downstream demand resilience is evident, with emerging sectors becoming growth drivers.
Although demand growth in the traditional construction sector has slowed, emerging industries such as photovoltaics, new energy vehicles, and electronics continue to release demand. New energy vehicles use seven times more silicone rubber than gasoline vehicles, and the medical field is experiencing significant demand growth due to population aging. The electronics sector is also rapidly expanding its applications in encapsulation and heat dissipation. It is predicted that domestic silicone demand growth will remain at 5%-7% from 2025 to 2027, with apparent consumption growth exceeding GDP growth, indicating strong industry demand resilience.