November Recovery Snapshot of the Silicone Industry:Production Cuts Break the Deadlock, Profit Recovery Heralds a New Cycle
2025-12-10
In November 2025, the silicone industry witnessed a historic turning point. Overcapacity in the previous two years—with domestic monomer operating capacity soaring from 5.4 million tons to 6.8 million tons (a nearly 25% increase)—had kept DMC prices persistently below the cost line, leading to an average industry loss of RMB 1,204 per ton in the first three quarters of 2025. This month, however, a confluence of initiatives led by domestic leading enterprises, coupled with price hikes by international giants, surging demand, and industrial upgrading, enabled the industry to achieve a turnaround and embark on a new cycle of high-quality development.
Industry Collaboration Delivers Remarkable Results in "Anti-Involution"
On November 12, Luxi Chemical took the lead in convening a meeting where core enterprises reached a consensus to cut the industry-wide operating rate by 30% starting early December and push DMC prices to RMB 13,500 per ton. Six days later, Hesheng Silicon Industry spearheaded the establishment of two long-term mechanisms: a dynamic price anchoring system locking DMC's benchmark delivered price between RMB 13,000-13,200 per ton, and a linkage mechanism triggering production cuts of up to 30% when inventories exceed 45 days and prices fall below cash costs for two consecutive weeks. With the top 6 enterprises (CR6) accounting for nearly 70% of the market share, the implementation was effectively guaranteed. Luxi Chemical, Hesheng Silicon Industry, and others took the lead in adjusting prices, driving a rapid rebound.
Dual Recovery in Prices and Profits
By late November, the spot price of DMC had risen to RMB 13,100 per ton, an 18% increase from the start of the month and over 32% higher than the annual low, breaking above the cost line. The average industry gross profit reached RMB 1,200 per ton, an improvement of nearly RMB 2,650 per ton from the loss-making status at the beginning of November. Enterprises with upstream industrial silicon raw materials held a distinct competitive advantage. The capital market responded positively: following Dow Chemical's announcement on November 27 to raise prices of silicone products in Greater China by 10-20% starting December, the silicone sector strengthened, with Hongbai New Materials and Chenguang New Materials hitting daily limit-ups, and many stocks gaining over 3%.
Multi-Pronged Support on the Demand Side
In traditional sectors, the recovery of the real estate market has boosted demand for construction adhesives, while home appliance subsidies have driven growth in demand for electronic and electrical products. In emerging fields:
New energy vehicles consume four times more silicone per unit than traditional fuel vehicles;
Solar PV requires 1,000-1,500 tons of high-end adhesives per GW, with TOPCon battery promotion increasing consumption by 40%;
Global demand for humanoid robots is expected to exceed 200,000 tons by 2026.
In overseas markets, polysiloxane exports rose by 34% in 2024 and maintained a 9.57% growth rate in September 2025, with multiple regions emerging as key growth drivers.
Accelerated Industrial Upgrading
Yongxiu, Jiangxi, secured 36 new silicone projects in 2025, with green energy projects expected to save RMB 160 million in electricity costs annually. A provincial-level "industrial brain" is set to launch by the end of the year, integrating over 170 enterprises. Policy-driven phasing out of high-energy-consuming capacity and cost reduction/efficiency improvement efforts by leading enterprises have enabled domestic companies to break through technological barriers and enter the international supply chain. Currently, the silicone industry is benefiting from the resonance of three major positive factors, and its prosperity is expected to continue its upward trajectory.
Previous:
Recommend News
Contact Us
Building 1, No. 23, Chashan Weixing Road, Chashan Town, Dongguan City, Guangdong Province, China
Tel: +86-769-82786088
Mobile: +86-18098293536
E-mail: wmdsb@longsunkeji.com
Follow Us
Copyright © 2024 Dongguan Longsun Material Technology Co.,Ltd