“Chuanhua to build 680,000-ton silicone project!” — Since the end of 2025, this news has repeatedly circulated in industry groups, raising concerns about overcapacity. However, the truth is the opposite: in 2026, there will be no new organic silicone monomer (DMC) capacity released nationwide. The so-called “large projects” like Chuanhua are actually downstream deep-processing expansions and have nothing to do with upstream monomer capacity growth. This misreading, caused by terminology confusion, is now being clarified.
According to public documents from the Hangzhou Planning and Natural Resources Bureau, Zhejiang Chuanhua Yixun New Materials Co., Ltd.’s “680,000-ton-per-year organic silicone new materials and high-end fine chemicals project” does not involve building methylchlorosilane monomer units. Instead, it uses purchased DMC as feedstock to produce high-value products such as phenyl silicone rubber, vinyl silicone oil, high-end silicone resins, and fluorine-free waterproofing agents. Phase one explicitly includes “3,000 tons/year of environmentally friendly high-end fluorine-free waterproofing agents,” a typical downstream extension of monomers rather than upstream expansion.
This positioning aligns with current industry consensus. According to the China Fluorosilicone Association, no new DMC monomer projects were approved for production in 2025–2026. Instead, led by industry leaders like Hesheng, Dongyue, and Xin’an, the sector is optimizing its structure through “capacity replacement”—shutting down outdated small units and concentrating resources on high-purity, specialty, and functional deep-processing.
“Equating ‘organic silicone new materials’ with ‘monomer capacity expansion’ is a typical conceptual error,” said a senior industry analyst. “The real shortage is not silicon itself, but the ability to turn it into chip encapsulation adhesives, medical catheters, or photovoltaic sealants.”
In fact, new projects recently announced by Chuanhua, Xin’an Tianyu, and Yuneng Silicones all focus on:
High-performance liquid silicone rubber (for EV sealing)
Electronic-grade modified silicone oil (for AI chip thermal management)
Weather-resistant silicone resin (for photovoltaic backsheet coatings)
These products have high technical barriers and gross margins exceeding 30%, do not increase total monomer supply, and in fact strengthen ties to upstream high-quality DMC capacity.
For the market, this clarification is critical. DMC prices are currently stable at ¥13,700/ton, based on a supply-demand rebalance of “no new monomers + coordinated reduction.” Misreading new projects as capacity expansion could cause missed purchasing opportunities.
“Future competition is not about producing more, but producing better,” is the growing industry consensus. When 680,000 tons no longer means “more silicon” but “higher-value applications,” the path for upgrading China’s silicone industry becomes truly clear.
