In September 2025, a new round of price increases will be launched in the domestic organic silicon market. According to industry monitoring platform data, since the end of August, the price of DMC (dimethyl cyclic siloxane mixture) in Shandong has risen from 16000 yuan/ton to 22800 yuan/ton, an increase of over 42.5%, setting a record for the largest monthly increase in nearly three years. This fluctuation not only broke the long-term sluggish pattern of the industry, but also triggered a revaluation of the organic silicon sector in the capital market, with multiple listed companies' stock prices rising by over 10% in a single day.



Supply and demand imbalance: overseas production capacity withdrawal and domestic demand explosion
The core driving force behind this round of price increases is the drastic changes in the global supply and demand structure. In July 2025, global silicone giant Dow Chemical announced that it will gradually shut down its UK silicone production base from 2026, involving an annual production capacity of 145000 tons of DMC. This decision directly led to an expansion of the supply gap in the European market, coupled with the reduced workload of French companies such as Eken and German companies such as Wacker due to public health incidents. The overseas production rate of organic silicon intermediates was less than 60%, and a large number of orders turned to China.


On the demand side, there is a trend of "multi-point explosion". In the traditional field, the construction industry has benefited from the policy of renovating urban villages. By 2025, the national plan is to renovate 50000 old residential areas, driving a 25% year-on-year increase in demand for building sealants; The new energy vehicle industry continues to expand, with a 40% increase in the amount of organic silicon materials used in a single electric vehicle compared to fuel vehicles, driving a surge in demand for products such as high-temperature adhesives and silicone oils. In terms of emerging tracks, high value-added fields such as photovoltaic film and 5G base station heat dissipation materials have become new growth poles, and it is expected that the related market size will exceed 20 billion yuan by 2025.


Cost support: Upstream raw material prices remain firm
The upward trend of organic silicon prices has also received strong support from the cost side. As the main raw material, the price of metallic silicon has risen by 18% since the second quarter of 2025, mainly due to production restrictions in major production areas such as Yunnan and Sichuan due to tight power supply, coupled with the recovery of demand in the polysilicon industry. At the same time, the prices of auxiliary materials such as methanol and chloromethane have risen synchronously, further compressing the profit margins of individual enterprises. According to estimates, the current production cost of DMC has risen to 19000 yuan/ton, and the industry average gross profit margin has recovered to around 15%, an increase of 8 percentage points from the beginning of the year.


Enterprise dynamics: Parallel expansion of production capacity and technological upgrading
Faced with market recovery, leading enterprises are accelerating their layout. Hesheng Silicon Industry has launched a 400000 ton/year organic silicon monomer expansion project in Shanshan Industrial Park with the integrated industrial chain of "ore monomer deep processing", which is expected to be put into operation in 2026; Xingfa Group and Wanhua Chemical have invested 5.4 billion yuan in Hubei to build Xinghua Silicon Material Base, focusing on the research and development of high-end products such as electronic grade silane and thermal conductive potting adhesive; Dongyue Silicon Materials strengthens its technological reserves in the field of semiconductor packaging materials by participating in future materials through the Science and Technology Innovation Board.


On the technical level, single component silicone products have become the focus of innovation. LUMISIL launched by Wacker Chemie ® 1K UV series UV curing adhesive solves the pain point of uneven mixing of traditional two-component products and achieves import substitution in the field of car display screen packaging; The MS adhesive Wuxi chemical additive developed by domestic enterprises for new materials has increased the construction efficiency of building sealants by 30% and has been applied in key projects such as the National Speed Skating Oval.


Industry outlook: Beware of overcapacity risks
Despite the current market recovery, the industry remains cautious about long-term trends. According to analysis by CITIC Securities, it is planned to add more than 1 million tons of organic silicon production capacity in China from 2025 to 2027. If the demand growth rate falls short of expectations, the industry may repeat the mistakes of the 2020 price crash. It is recommended that enterprises focus on high gross profit deep processing fields, such as silicon carbon negative electrode materials, photovoltaic film, etc., and avoid trade barriers by building factories overseas.


As of September 10th, the DMC market quotation remained in the range of 22500-23000 yuan/ton, with downstream procurement mainly focused on essential needs. As Dow Chemical enters the countdown to capacity withdrawal, the silicone market may continue to maintain a tight balance in the fourth quarter, and the price center is expected to move up to 25000 yuan/ton.