On December 2, 2025, the domestic organic silicon market continued its upward trend since November, with the mainstream product dimethyl cyclic siloxane mixture (DMC) price stabilizing in the range of 13100-13500 yuan/ton, a cumulative increase of 21% compared to early November. The price rebound this time is driven by the dual factors of industry coordinated production reduction and downstream demand recovery, marking the official emergence of the organic silicon industry from a two-year downturn cycle.


The mechanism of reducing production and increasing prices has been implemented, and leading enterprises are leading the industry in self-discipline
Since the "Market Rescue Conference" led by Luxi Chemical on November 12th, the domestic organic silicon industry has formed a consensus of "reducing production by 30%+price coordination". On November 18th, Hesheng Silicon Industry further organized a meeting at the level of actual controllers to refine the details of production reduction supervision and price implementation, ensuring industry synergy. According to data from Baichuan Yingfu, as of November 21st, DMC prices have risen from 11000 yuan/ton at the beginning of November to 13000 yuan/ton, and the industry average gross profit has increased to 1209 yuan/ton, an increase of 2650 yuan/ton from the beginning of the month.


Leading enterprises play a crucial role in this round of adjustment. Hesheng Silicon Industry, with a production capacity of 1.73 million tons/year of organic silicon monomers (accounting for 26% of the total domestic production capacity), has become the core force in implementing production cuts. The company has achieved a single quarter turnaround from losses to profits in the third quarter, with a net profit attributable to the parent company of 76 million yuan. Its coordinated layout of industrial silicon and organic silicon effectively mitigates market volatility risks. Luxi Chemical has further consolidated its production capacity advantage through the full operation of a 400000 tons/year organic silicon new project. Its chemical new materials sector (including organic silicon) accounts for over 60% of revenue, becoming the core engine of performance growth.


Structural improvement on the demand side, emerging fields becoming growth poles
The recovery of downstream demand provides support for price increases. According to a research report by Guotou Securities, the apparent consumption of organic silicon in China reached 1.62 million tons in the first three quarters of 2025, a year-on-year increase of 5.5%. It is expected that the annual consumption will exceed 2.1 million tons. Emerging fields such as new energy and electronic appliances have become the main growth points: the photovoltaic industry added 48GW of installed capacity in the third quarter, driving a surge in demand for packaging adhesives; The penetration rate of new energy vehicles has increased to 35%, and the usage of materials such as battery sealing and cable insulation has doubled; The construction of ultra-high voltage power grids is accelerating, and the performance requirements for organic silicon insulation materials are continuously upgrading.


In addition, breakthroughs in cutting-edge fields such as humanoid robots and hydrogen energy have opened up new markets for organosilicon. For example, silicone, as the core material of flexible skin for robots, has been commercially applied; The penetration rate of silicon-based sealant in high-pressure hydrogen storage tanks exceeds 80%, and the market size of organosilicon in the global hydrogen energy industry chain is expected to exceed 5 billion US dollars by 2025.


Industry pattern optimization, long-term value reassessment
On the supply side, the expansion cycle of domestic organic silicon production capacity is nearing its end. No new production capacity will be put into operation in 2025, and the "Organic Silicon Industry Standard Conditions (2025 Edition)" will raise the entry threshold for individual projects to 300000 tons per year, accelerating the clearance of small production capacity. On the overseas front, Dow Chemical plans to shut down 145000 tons of production capacity in the UK, and the EU carbon tariff policy may lead to the shutdown of 330000 tons of production capacity for Wacker and Elkem in Europe, continuously optimizing the global supply pattern.


Institutions predict that the domestic supply and demand gap for organic silicon will expand to 50000 tons by 2026, and prices are expected to enter an upward cycle. Hua'an Securities estimates that the current industry operating rate has increased to 74.25%, but production still cannot meet domestic demand and export growth (expected to exceed 500000 tons of exports for the whole year). In this context, enterprises with full industry chain layout and scale advantages will benefit first, and leading companies such as Hesheng Silicon Industry and Xingfa Group may experience a "Davis double click" in terms of stock price and performance.