On November 19, 2025, Shanghai - Under the dual pressure of industry supply-demand imbalance and sustained low prices, a meeting of actual controllers of China's organic silicon industry was held in Shanghai on November 18. Leaders of top enterprises including Hesheng Silicon Industry, Dongyue Silicon Materials, Xingfa Group, etc. gathered together and finally reached a consensus of "industry synergy to reduce production by 30%", and set the DMC (organic silicon intermediate) price target at 13500 yuan/ton, striving to achieve it within half a month. This conference is seen as a key turning point in the industry's anti internal competition.


Background: overcapacity and price inversion crisis
In recent years, China's organic silicon production capacity has rapidly expanded, accounting for over 70% of the global market share, but the demand growth rate has not matched the supply. As of the end of 2024, the domestic DMC production capacity has reached 3.5 million tons, but the actual operating rate is less than 70%, and the price has been hovering around the cost line for a long time. At the beginning of November 2025, DMC prices fell to 11000 yuan/ton, and companies generally faced pressure to incur losses. At the same time, overseas giants such as Dow Chemical have announced the closure of 200000 tons of DMC production capacity in the UK due to high energy costs, further intensifying domestic market competition.


Conference core: Production reduction, price increase and long-term mechanism
The meeting clarified that the industry will uniformly reduce production by 30% from early December and establish a dynamic monitoring mechanism. Leading enterprises will take the lead in establishing a "Price Coordination Committee" to regularly evaluate the implementation effect. The participating companies promise to further reduce production capacity if the price does not meet the target. In addition, the conference also proposed a dual wheel drive strategy of "technological upgrading" and "green transformation", encouraging enterprises to increase investment in high-end fields such as electronic grade silicone oil and bio based silicone rubber, and reduce dependence on low-end markets.


Market response: Price rebound and capital attention
After the announcement, the stock prices of the organic silicon sector collectively rose. As of the close on November 19th, Hesheng Silicon Industry has risen by 6.55%, with Dongyue Silicon Materials, Silicon Treasure Technology, and others following suit with gains of over 5%. In terms of the spot market, DMC prices have rebounded to 12500 yuan/ton, and most manufacturers have suspended trading and reporting. It is expected that prices will continue to rise in the future. Industry insiders analyze that if the production reduction can be strictly implemented, it is expected to promote the industry to return to rational competition. However, we need to be wary of the policy effectiveness decline caused by small and medium-sized enterprises' "giving lip service but secretly violating".


Expert opinion: Green transformation is a long-term solution
Experts from the China Fluorosilicon Organic Materials Industry Association pointed out that reducing production can only alleviate short-term conflicts, and the industry needs to accelerate its transformation towards high-end and green products. For example, the first 10000 ton bio based silicone rubber production line in Shandong has been put into operation, and its raw materials come from rice husks to produce highly active silane, with a cost close to that of petroleum based routes; Yongxiu County in Jiangxi Province has established a 30 million yuan innovation fund to support enterprises in tackling bottleneck technologies such as photovoltaic packaging adhesive and medical grade liquid silicone. By 2024, there will be 80 local high-tech enterprises, with a year-on-year increase of 40% in research and development investment.