The silicone industry is experiencing a price recovery, and the supply chain is entering a new phase of high-quality development
2026-05-06
Global Market Synergy Drives Steady Rise in Price Levels
Since March 2026, the silicone industry chain has experienced a significant wave of price increases. Directly impacted by sharp rises in the prices of upstream raw materials such as crude oil, naphtha, and methanol, coupled with rising global logistics and energy costs, companies both domestically and internationally have been raising their product prices.
Currently, the mainstream transaction price for domestic DMC (dimethyl siloxane) has rebounded to around 15,000 yuan per ton, representing an increase of over 30% from the temporary low recorded at the end of 2025. In the international market, Shin-Etsu Chemical announced a global price increase of more than 10% for its silicone products effective May 1, while Wacker Chemie and Dow Chemical implemented multiple rounds of price hikes in April and March, respectively. This coordinated global price increase has provided strong external support for the stabilization of domestic silicone prices.
Industry “Anti-Involution” Efforts Bear Fruit, Supply-Demand Structure Continues to Optimize
This round of price increases is not merely short-term speculation; its core driving force stems from profound structural changes within the industry. Following earlier periods of capacity expansion and low-price competition, the domestic silicone industry launched a resolute “anti-involution” campaign starting in late 2025.
Through coordinated self-discipline among leading industry players, the entire sector proactively implemented a strategy of reducing production to stabilize prices. From March to May, the overall production cut ratio was raised to 35%, effectively establishing a floor for supply. At the same time, the gradual phase-out of some outdated overseas production capacity (such as Dow’s UK plant) further alleviated global supply pressures. Driven by both supply contraction and a recovery in demand, inventory pressures in the industry have significantly eased, and the market is shifting from “price wars” back to “value-based competition.”
Explosive Growth in Emerging Demand Drives Long-Term Industry Growth
While the supply side is being optimized, the demand structure for silicones is also undergoing positive changes. Although demand in the traditional construction sector remains relatively stable, emerging sectors—represented by photovoltaics, new energy vehicles, AI computing liquid cooling, and semiconductor packaging—are becoming the core drivers of silicone consumption.
With the global energy transition and the rapid development of artificial intelligence technology, silicones—as a key strategic new material—are increasingly demonstrating their irreplaceable role in high-end applications such as thermal management, sealing, and insulation. The increase in orders from high-value-added downstream sectors has not only absorbed market capacity but also laid a solid foundation for the long-term stability of silicone prices.
Currently, the silicone industry is at a critical juncture in its cyclical turnaround. A reasonable return to market prices will help restore corporate profitability and encourage the industry to allocate more resources toward technological innovation and the development of high-end products. In the future, with coordinated efforts across the entire supply chain, the silicone industry is poised to enter a new phase of healthier, more sustainable, and high-quality development.
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