In December 2025, the silicone industry is undergoing dramatic changes. After more than a year of price declines and excess capacity, the core product Dimethyl Cyclosiloxane (DMC) has become the market focus—prices have surged by over 20% within just one month, with spot quotations approaching RMB 13,500 per ton.
This price rally is no coincidence. According to multiple sources, in mid-November several leading companies—including Luxi Chemical, Hoshine Silicon Industry, and Dongyue Silicone Materials—held closed-door meetings and reached a consensus to implement a 30% coordinated production cut, while also setting phased price targets. This move is widely regarded within the industry as the most substantive collaborative action in the past five years, marking the official launch of an industry-wide effort to combat excessive internal competition, often referred to as “anti-involution.”
Demand fundamentals are equally strong. Global photovoltaic installations in 2025 are expected to reach 600 GW, representing year-on-year growth of over 30%. Silicone sealants used in PV modules have high technical barriers and long certification cycles, giving leading players such as Huitian New Material a market share exceeding 45%. Meanwhile, in sectors such as new energy vehicles, energy storage, and humanoid robotics, high-end products including high-temperature silicone rubber and silicone pressure-sensitive adhesives are rapidly penetrating the market. Companies like Hengxing Technology and Jinyinhua have already made strategic investments in cutting-edge applications such as bionic skin and flexible joints.
On the policy front, positive signals continue to emerge. The upcoming 15th Five-Year Plan has identified silicone as a key new material, and relevant government ministries are expected to convene industry symposiums soon. Market participants anticipate the possible rollout of production controls and environmental support measures similar to past supply-side reform initiatives.
Although some companies—such as Dongyue Silicone Materials—are still reporting losses in the first three quarters, the overall industry outlook is improving. With an optimized supply-demand balance and over 60% of high-quality capacity exported and recognized overseas (including compliance with EU REACH certification), industry fundamentals are steadily recovering.
Analysts note that this DMC-led price surge is not merely a short-term correction, but may well signal the beginning of a new upward cycle for the silicone industry.
