On November 17, 2025, the domestic organic silicon market ushered in a new round of price upward cycle. According to the monitoring of Zhuochuang Information, the average price of DMC (dimethyl cyclic siloxane mixture) in China was 12500 yuan/ton on November 13th, a significant increase of 1000 yuan/ton from the previous working day, setting a record for the largest daily increase of the year. The direct driving factor behind this price surge is the implementation of industry coordinated production reduction strategies. Since early November, leading companies such as Hesheng Silicon Industry, Dongyue Silicon Materials, and Xin'an Shares have jointly announced a 30% reduction in production, and have tightened market supply through measures such as closing deals without quotes and limiting orders. At the same time, the industry's social inventory has been declining for three consecutive weeks, with a decrease of about 12% compared to the beginning of the month, further strengthening the tight supply-demand situation.


Background of Production Reduction and Industry Status
In 2025, the organic silicon industry will face dual challenges of overcapacity and profit pressure. Data shows that the domestic DMC production capacity was 1.675 million tons/year in 2020, and has expanded to 3.44 million tons/year by 2024, with an average annual compound growth rate of 19.71%. However, the growth rate on the demand side did not match the expansion of supply: although domestic consumption increased by 19.66% year-on-year to 1.5128 million tons in the first three quarters of 2025, the growth rate of export volume slowed down to 2.30% under the influence of a high base. The imbalance between supply and demand has led to long-term negative profits in the industry, forcing companies to repair the market ecology by reducing production.


Market reactions and future prospects
After the announcement of the production reduction, the A-share organic silicon sector quickly responded. On November 10th, the stock prices of leading companies such as Dongyue Silicon Materials and Hesheng Silicon Industry rose by over 8% in a single day, driving the sector index up 3.15% and achieving a turnover of 6.77 billion yuan. Behind the rebound in confidence in the capital market is the industry's expectation of price recovery. Guoxin Securities analysis pointed out that if the production reduction strategy continues to be implemented, DMC prices are expected to break through the 13000 yuan/ton mark, and the industry average profit may turn positive in the first quarter of 2026. However, short-term risks still exist: the recovery of orders in downstream areas such as silicone rubber and silicone rubber products is slow, and the operating rate of enterprises is only about 60%. Price transmission requires substantial volume support from terminal demand.


Policy and Industry Dynamics
Local governments are using policy tools to promote industry upgrading. Yongxiu County, Jiangxi Province has established a 30 million yuan innovation award fund to support enterprises in jointly building a joint laboratory for organic silicon new materials with Zhejiang University Quzhou Research Institute, focusing on breakthroughs in high-end fluorinated chemicals, special silane and other "bottleneck" technologies. Jiujiang City plans to establish a "one core, multiple points" layout for the organic silicon industry through a 10 billion yuan industrial investment guidance fund, in order to strengthen regional competitiveness.