China Silicone Market Maintains a Gradual Upward Trend
January 20, 2026 | 17:30
As downstream inventory replenishment enters its final stage before the Lunar New Year, China’s organosilicon market continues to demonstrate a steady yet moderate upward movement. Supported by tightening supply expectations and cost-side resilience, the industry maintains a structurally balanced and disciplined price trajectory.
All major silicone product segments recorded price increases last week. Market sentiment has strengthened, partly influenced by expectations surrounding the potential cancellation of export tax rebates, which has reinforced producer pricing confidence.
Cost Side: Industrial Silicon Strengthens Price Floor
As of January 20, the price of 421# industrial silicon for silicone applications stood at RMB 9,800–10,200/ton.
Key cost dynamics:
- Southwest China remains in the dry season, leading to reduced hydropower availability
- Electricity costs have increased
- Industrial silicon production has declined accordingly
These factors continue to reinforce the cost floor of the silicone industry, providing strong underlying support for price stability.
Supply Side: Tight Balance Strengthens Further
The overall industry operating rate remains at approximately 65%, reflecting sustained supply discipline.
Notable developments include:
- Multiple monomer producers in East and North China operating at reduced loads
- Ongoing maintenance in Sichuan facilities
- Increasing expectations of further supply contraction
The structural tight balance between supply and demand continues to strengthen.
Demand Side: Structural Divergence Continues
Sector Performance Overview:
- New Energy: Demand remains resilient and stable
- Construction: Winter seasonality results in mild demand contraction
- Photovoltaic (PV): Anticipation of export tax rebate cancellation stimulates “rush-to-export” demand
- Electronics: Stable rigid demand persists
Procurement is now primarily driven by essential needs, while some enterprises have transitioned into a digestion and observation phase.
Inventory & Logistics: Destocking Accelerates
Core silicone product inventories remain at relatively low levels.
Late January developments:
- Logistics capacity gradually tightening ahead of the holiday
- Enterprises accelerating shipment schedules
- Inventory levels declining further
Current market behavior is dominated by inventory digestion, which reinforces short-term price resilience.
Product Segment Performance
DMC (Dimethylcyclosiloxane)
- Mainstream quotation: RMB 13,800–14,000/ton
- Prices increased moderately last week
- Downstream chase-buying sentiment weakened
- Pre-holiday procurement nearing completion
Supply contraction expectations continue to support pricing.
107 Silicone Rubber
- Mainstream quotation: RMB 14,500–14,800/ton
- Followed DMC upward trend
- Output constrained by reduced DMC supply
- Leading monomer producers adopted a “stable pricing, volume optimization” strategy
Demand profile:
- New energy & electronics: resilient
- Construction: seasonally weak
- Procurement mainly demand-driven
Methyl Silicone Oil
- Domestic methyl silicone oil quotation: RMB 15,500–16,100/ton
The segment maintains a steady upward trajectory.
Demand drivers:
- Stable consumption in new energy, textile, and personal care sectors
- PV “export rush” further stimulates incremental demand
- Downstream acceptance of higher prices has improved
Raw Silicone Rubber (HCR)
- Mainstream quotation: RMB 14,800–15,000/ton
Supported by:
- Elevated upstream raw material costs
- Reduced operating rates
- Strong demand from new energy vehicle and photovoltaic module applications
The price floor remains firm under dual cost and supply constraints.
Market Outlook: Gradual Uptrend with Slowing Momentum
Overall, the silicone market is expected to continue operating under a “steady and gradual upward” pattern.
Key influencing factors:
- Production reduction expectations
- Completion of holiday stocking
- Export tax policy adjustments
- Persistent tight supply-demand equilibrium
While the pace of price increases is moderating, the structural balance of the market remains intact. The industry is transitioning into a stable consolidation phase, with tight fundamentals likely to persist into the post-holiday cycle.
In summary, the organosilicon sector is closing January under controlled upward momentum, characterized by disciplined supply, resilient cost support, and structurally differentiated demand—forming a solid foundation for early Q1 market stability.
