I. Deep Adjustment of Supply-Demand Dynamics and Signs of Market Bottoming Out
The domestic silicone industry is moving away from the extensive growth phase characterized by blind capacity expansion, with the supply-demand balance gradually stabilizing. Supply pressures resulting from earlier waves of concentrated capacity additions are dissipating; the industry has spontaneously reached a consensus to cut production and support prices, with operating rates at major enterprises holding steady between 60% and 70% and the pace of new capacity release slowing significantly. Prices are showing a trend of weak stability with narrow fluctuations—with the annual average DMC price projected to remain between 14,500 and 15,500 RMB/ton—and profit margins are recovering to the 1,500–2,000 RMB/ton range. Coupled with external pressure from the cancellation of export tax rebates, the previous model of cutthroat, volume-driven competition is being disrupted.

II. Evolving Demand Structure and Growth Potential in Emerging Sectors
The share of demand from the traditional construction sector has gradually declined—dropping from 31% in 2022 to 25% in 2024—while emerging sectors such as new energy vehicles (NEVs), photovoltaics, and electronic information have become core growth engines. The volume of silicone materials used per NEV is seven times that of a conventional internal combustion engine vehicle, and demand for silicone sealants used in photovoltaic module encapsulation is rising in tandem with global installed capacity. Meanwhile, the commercialization of new applications—such as liquid cooling materials for AI computing power, seals for robotic joints, and thermal management materials for AR devices—is driving an upgrade in the industry's consumption structure. Currently, my country's per capita silicone consumption remains below 1 kg—far lower than the 2 kg level seen in developed nations—indicating substantial long-term growth potential.

III. Accelerated High-End Transformation and Expansion into High-Value-Added Segments
The industry's development focus has shifted comprehensively toward high-quality growth, with the market share of high-value-added products—such as electronic-grade silicone, medical-grade silicone rubber, and high-performance polysiloxanes—continuing to rise. Technical achievements showcased at the 2025 Fluorine and Silicon Industry Conference demonstrate that domestic enterprises have made breakthroughs in areas such as low-density silicone materials for lithium batteries, high-strength electronic sealants, and self-adhesive liquid silicone rubber; high-end products that previously relied on imports are increasingly being replaced by domestically produced alternatives. As global silicone production capacity increasingly concentrates in China, the domestic industry chain is steadily moving up the value chain—shifting from a primary focus on raw material exports toward deep-processed products and high-end specialty materials.