On November 27, 2025, Shanghai, China - Recently, the silicone industry has reached a major turning point. Under the leadership of industry leaders, a collaborative production reduction action centered on "anti involution and price stabilization" has officially been implemented, driving up the prices of core products and significantly restoring market confidence.


The industry production reduction agreement has been implemented, with a weekly price increase of over 20%
On November 12th, Luxi Chemical took the lead in holding an industry conference and reached a dual goal of "reducing production by 30% and setting a DMC price target of 13500 yuan/ton" with multiple leading enterprises. Subsequently, on November 18th, the "actual controller level meeting" chaired by Hesheng Silicon Industry further refined the supervision mechanism, clarified that the production reduction benchmark is 30% of the current operating rate (about 70%), and established a price coordination execution group. As a result, the price of organic silicon DMC surged by 20% in a single week. As of November 26th, the mainstream quotation has reached 13200 yuan/ton, rebounding by 2200 yuan/ton from the low point at the end of October, marking the largest weekly increase of the year. Downstream products such as 107 glue, raw rubber, silicone oil, etc. have risen synchronously, with an increase of 1700-2200 yuan/ton.


Leading enterprises have made positive statements, and the reshaping of the industry landscape is imminent
Hesheng Silicon Industry clearly stated in the announcement that this production reduction is an important measure in response to the national "anti involution" policy, aimed at reversing the price inversion situation through industry self-discipline. As a global leader in silicon-based new materials, Hesheng Silicon Industry's industrial silicon production capacity ranks first in China, with its organic silicon business accounting for over 60%. This production reduction will directly reduce market supply by about 100000 tons per year. Dongyue Silicon Materials, Xin'an Shares and other companies have also followed up with statements, emphasizing the strategy of "production based on sales" and prioritizing the supply of high-end products.


Marginal improvement in supply and demand relationship, long-term profit recovery is expected
According to statistics, the production capacity of organic silicon intermediates in China will reach 6.74 million tons by 2025, but the actual output is affected by weak demand, and the operating rate will remain below 70% for a long time. This production reduction will effectively digest excess capacity and promote the industry to shift from a "simultaneous decline in quantity and price" to a "stable increase in quantity and price". Debon Securities analysis points out that if the production reduction is implemented properly, the industry gross profit margin is expected to rebound from the current 5% to 12% -15% in 2026, and the profit elasticity of leading enterprises is significant.


The capital market has responded enthusiastically, and sector valuations are accelerating their recovery
Stimulated by the news of production cuts, the organic silicon sector has been active recently. On November 7th, multiple stocks including Dongyue Silicon Materials, Jiangsu Guotai, and Hesheng Silicon Industry hit the daily limit up, with the overall increase of the sector exceeding 5%. The flow of funds shows a continuous net inflow of main funds, indicating an increased market expectation for the improvement of industry fundamentals. Analysts believe that with the gradual implementation of the production reduction agreement, the organic silicon industry is expected to enter a new upward cycle, and leading enterprises with full industry chain advantages will benefit first.