On November 6, 2025, Shanghai - With the global organic silicon industry entering a critical period of "green restructuring and technological fission", China is accelerating the consolidation of its dominant position in global production capacity, driven by the advantages of industrial chain integration and demand in the new energy sector. According to the latest data from Shanghai Nonferrous Metals Network (SMM), the cumulative production of industrial silicon in China from January to October 2025 reached 3.4699 million tons. Although it decreased by 16.6% year-on-year, the monthly production in October increased by 7.5% month on month to 400000 tons, demonstrating the market's resilience to the "anti involution" policy.


Simultaneous efforts from both supply and demand sides, accelerating the transformation towards high-end products
On the demand side, organic silicon, as a core material for emerging industries such as new energy, 5G, and ultra-high voltage, continues to experience high demand. In the first three quarters of 2025, the domestic production of organic silicon monomers will be about 1.9 million tons, a year-on-year increase of 16%, and there is a clear trend of global new production capacity concentrating in China. For example, Dow Chemical plans to shut down some of its silicone monomer production capacity in the UK by 2026, and it is expected that China's production capacity will increase to 84.72% by 2029, an increase of 5.15 percentage points from 2024.


On the supply side, industry-leading enterprises consolidate their advantages through technological iteration and capacity optimization. As a global leader in industrial silicon, Hesheng Silicon Industry achieved a non recurring net profit of 262 million yuan and a gross profit margin of 8.67% in the third quarter of 2025. With stable power supply and low-cost advantages, its Xinjiang base is expected to account for over 60% of production in the fourth quarter. The company has promoted the extension of the industrial chain at the same time. Its midstream and downstream products such as amino silicone oil and organic silicone lotion have achieved industrialization, and high-end products such as zero degree human silicone and medical grade rubber compounds have accelerated the replacement of domestic products.


Green transformation drives technological upgrading, and circular economy becomes a new growth point
At the policy level, the Ministry of Industry and Information Technology's "15th Five Year Plan for High Quality Development of the New Materials Industry" clearly requires that the energy consumption of newly built single units be 20% lower than the industry average, and promotes the replacement of traditional fixed beds with fluidized bed reactors. Dongyue Group has achieved a 34% reduction in consumption through the upgrade path of chloromethane method, while breakthroughs in bio based materials have triggered industry changes - the world's first 10000 ton bio based silicone rubber production line has been put into operation in Shandong, and the cost of high activity silane technology from rice husks of the Chinese Academy of Sciences is approaching that of petroleum based routes. Hesheng Silicon Industry has partnered with chemical giants to layout sugarcane based methanol projects in Brazil, solving the price linkage dilemma of "methanol metal silicon".


Market prices stabilize and rebound, further increasing industry concentration
Affected by the increase in electricity prices during the dry season in Southwest China, the utilization rate of industrial silicon production capacity in Sichuan Yunnan region is expected to drop to 30%, driving price recovery. As of early November, the market price of organic silicon DMC in East China remained stable in the range of 10900-13000 yuan/ton, rebounding by more than 15% from the low point in the third quarter. A securities research report pointed out that with the end of the industry's expansion cycle and the increase in the localization rate of high-end products, enterprises with a full industry chain layout will fully benefit, and the growth potential of leading companies such as Hesheng Silicon Industry and Dongyue Group will be highlighted.