In January 2026, driven by both policy and market factors, China's silicone industry is accelerating its transformation from "scale expansion" to "quality upgrading". As the cancellation of export tax rebate policies for photovoltaic and other products on April 1st approaches, the industry is facing a dual test of cost pressure and structural changes. Leading enterprises are gradually occupying the initiative in the high-end market through technological barriers and industrial chain integration.


The cancellation of export tax rebates is forcing industrial upgrading
Starting from April 1, 2026, the value-added tax export rebate policy for primary form polydimethylsiloxane (organic silicon basic raw material) will be officially cancelled, involving products under tax number 39100000. According to calculations, taking 107 glue with a current domestic market price of about 14200 yuan/ton as an example, after canceling the 13% tax rebate, the export cost per ton will increase by about 1600 yuan. This policy adjustment directly impacted small and medium-sized export enterprises that rely on price competition, but also provided an opportunity for the industry to transform into high value-added fields.


The analysis points out that the policy goal is to guide resources from the primary product field with low added value and homogeneous competition to the deep processing track with high technological content and high profit margins. For example, the demand for high-temperature and corrosion-resistant special organic silicon materials has surged in fields such as new energy and electronic appliances, while domestic enterprises are filling the market gap through research and development breakthroughs. A certain enterprise has recently launched products such as 0-degree human silicone and medical grade liquid silicone rubber, which have reached the international leading level and successfully entered the supply chain of the textile, cosmetics, and medical industries.


Industry self-discipline resonates with cost pressure
Since the end of 2025, the organic silicon industry has been promoting supply side reform through the "anti involution" campaign. Mainstream manufacturers have jointly reduced production by 30% and established a price coordination mechanism, effectively alleviating the supply-demand imbalance. Data shows that the price of organic silicon DMC increased by over 10% in December 2025, and by mid January 2026, it had climbed to 13700-14000 yuan/ton. The industry average operating rate remained at around 66%, and inventory pressure was significantly reduced.


At the same time, global energy price fluctuations and rising raw material costs further push up production costs. A certain international chemical giant recently announced plans to shut down 150000 tons of organic silicon monomer production capacity due to high energy costs in Europe, providing an opportunity for domestic enterprises to replace overseas market share. From January to October 2025, the export volume of Chinese organic silicon to Europe increased by over 30% year-on-year, and the proportion of high-end products gradually increased.


Structural differentiation accelerates, with top enterprises leading the way
During the industry reshuffle period, enterprises with the ability to integrate the entire industry chain demonstrate stronger resilience. Taking a certain Xinjiang base enterprise as an example, it has achieved full chain autonomy and controllability from industrial silicon to organic silicon monomers through the integrated layout of "coal electricity silicon". The low-priced electricity provided by its own power plant and the huge self-sufficiency of industrial silicon make its comprehensive cost 15% -20% lower than its peers. In the third quarter of 2025, the company's non attributable net profit reached 262 million yuan, turning losses into profits month on month and leading the way out of the industry downturn.


Industry insiders believe that with the implementation of export tax rebate policies and the tightening of "dual carbon" supervision, the concentration of the industry will further increase. It is expected that from 2026 to 2028, top enterprises with technology, cost, and global operational capabilities will occupy a larger market share, while the survival space of small and medium-sized enterprises will rely more on differentiated competition in segmented markets.