On November 28, 2025, Beijing - Recently, the silicone industry has undergone a deep adjustment in the supply and demand pattern under the consensus of "anti involution", with prices significantly rebounding and driving the A-share silicone concept sector to rise. As of the close on November 27th, the organic silicon concept sector has risen by 4.12%, with stocks such as Huasheng Lithium Battery, Jin Yinhe, and Yuanxiang New Materials rising by over 10%. Hongbai New Materials and Chenguang New Materials have also hit the daily limit up, becoming the focus of the market.


Price reversal: triple logic resonance of supply and demand, cost, and policy
According to monitoring by the Purchasing and Plastics Research Institute, the domestic price of organic silicon DMC (intermediate) has risen to 12000-12500 yuan/ton, with a maximum daily increase of 1000 yuan/ton, a cumulative increase of over 1000 yuan/ton since early November, an increase of nearly 20%. This price rebound is not a short-term pulse, but a clear signal of a fundamental reversal in the industry.


The core driving force comes from the industry's "supply side revolution". In 2024, the domestic production capacity of organic silicon monomers reached 3.35 million tons, but the capacity utilization rate was only 67%, reaching a new low since 2018. The continuous overcapacity has led to vicious competition in the industry. In the first three quarters of 2025, the average loss of DMC reached 1204 yuan/ton, intensifying the survival pressure of the entire industry. In this context, Luxi Chemical took the lead in holding an industry "market rescue conference" on November 12th, and major domestic enterprises reached a consensus: the industry wide operating rate will be uniformly reduced by 30%, and the measures will be fully implemented in early December. On November 18th, Hesheng Silicon Industry further led a meeting at the level of actual controllers to refine the production reduction supervision mechanism and price coordination plan.


The combination of leading companies and high concentration ensures the execution of production cuts. Currently, CR6 accounts for nearly 70% of the domestic organic silicon industry, with Hesheng Silicon Industry occupying an absolute dominant position with a production capacity of 880000 tons per year, followed closely by enterprises such as Dongyue Silicon Materials and Xin'an Shares. After the efficient implementation of the production reduction policy, many mainstream individual factories have collectively closed down and restricted sales, and the inventory level of enterprises continues to decline. Pre sale production has been scheduled until mid December, and the price support foundation is extremely solid.


Cost support and demand recovery: price stabilization
On the cost side, industrial silicon accounts for over 40% of DMC production costs, and the current price of industrial silicon is about 11000 yuan/ton, providing approximately 5700 yuan/ton of cost support for DMC. Recently, the photovoltaic chain has launched a campaign to reduce outdated production capacity, with 17 silicon material companies planning to form a consortium. Coupled with the approaching dry season in the southwest region, industrial silicon production has decreased. The spot premium for industrial silicon futures has reached 800-1000 yuan/ton, with strong support from the bottom of the price.


On the demand side, domestic demand for organosilicon will achieve a compound growth rate of over 15% from 2021 to 2024, and the growth rate will further increase to 20% in the first three quarters of 2025. The demand structure is undergoing profound changes: the proportion of traditional construction fields is declining, and emerging fields such as new energy vehicles and photovoltaics have become core engines. Among them, the use of organic silicon in new energy vehicles is 7 times that of traditional fuel vehicles, and the consumption in this field is expected to surge by 44.2% by 2025; The demand for photovoltaic module packaging adhesive increased by 19.4% year-on-year, while the demand for electronic packaging driven by 5G and AI climbed by 16.7%. The overseas market growth is also significant. After Dow Chemical closed its UK factory, China's silicone production capacity has accounted for 77.33% of the world's total, and the space for export substitution has expanded. In 2024, the export volume will increase by 34.21% year on year, and the countries along the "the Belt and Road" will become the main contributors.


Industry outlook: Clear bottom reversal signal, strengthened leading advantage
The industry expects that the annual average price of DMC is expected to remain stable in the range of 11500-12500 yuan/ton from 2025 to 2027, and the supply-demand imbalance will be fundamentally improved around 2027. With the continuous transfer of global production capacity to China and the increasing global discourse power of domestic enterprises, it is expected that the proportion of China's organic silicon production capacity will further increase from the current 77% to over 85%. Leading enterprises with the ability to integrate the entire industry chain, such as Hesheng Silicon Industry, Xin'an Shares, Dongyue Silicon Materials, etc., will directly benefit from price increases and seize the opportunity in high-end product import substitution.