As the Lunar New Year approaches, China’s organosilicon (silicone) market has entered a typical pre-holiday stabilization phase. This week, overall pricing remained firm and orderly, with the industry gradually moving into a seasonal “silent period.” Supply-demand fundamentals continue to tighten structurally, while cost-side support remains resilient despite mild fluctuations.
As of February 14, the mainstream market conditions are summarized as follows:
The price of 421# industrial silicon for silicone applications stood at RMB 9,800–10,200/ton.
The Southwest region remains in the dry season, where higher hydropower tariffs have increased production costs. As a result:
- Silicon smelters have reduced operating rates
- Capacity releases remain constrained
- Overall output is limited
This dynamic continues to offer cost-side support to the silicone industry, preventing aggressive downward price pressure.
Supply Side: Operating Rates Decline Further
Industry-wide operating rates are currently around 64%, reflecting ongoing contraction on the supply side.
Key developments include:
- Several monomer producers in East China and North China have reduced operating loads
- Facilities in Sichuan Province remain under maintenance
- Effective market supply continues to tighten
Additionally, with the Spring Festival approaching:
- Logistics capacity is gradually tightening
- Some enterprises have halted production earlier for holiday shutdown
- Pre-holiday supply availability is further constrained
The supply side is therefore entering a structural tightening phase, reinforcing price stability.
Demand Side: Structural Divergence Across Sectors
Demand performance shows clear differentiation across downstream industries:
1. New Energy Sector
- Demand remains resilient
- Steady growth continues
- Strong support for high-end silicone materials
2. Construction Sector
- Winter construction slowdown affects terminal demand
- Slight seasonal decline observed
3. Photovoltaic (PV) Sector
- Anticipation of export tax rebate cancellation
- “Rush-to-export” behavior stimulates short-term demand
4. Electronics Sector
- Maintains stable rigid demand
Currently, most downstream enterprises have largely completed pre-holiday stocking, and market sentiment has shifted toward cautious observation.
Inventory Situation: Low Levels Leave Room for Post-Holiday Replenishment
Downstream inventory levels remain relatively low, creating sufficient space for replenishment after the Spring Festival production resumption. This supports expectations of stable-to-firm pricing in the near term.
Product Segment Performance
DMC (Dimethylcyclosiloxane)
- Mainstream quotation (Feb 14): RMB 13,800–14,000/ton
- Price increase momentum has clearly slowed
- Pre-holiday procurement largely completed
The DMC market remains stable, with limited short-term volatility.
107 Silicone Rubber
- Mainstream quotation: RMB 14,500–14,900/ton
- Supported by upstream cost pressure
- DMC supply contraction leads to synchronized output reduction
Demand breakdown:
- New energy & electronics: stable
- Construction: slight pullback
Overall, the market maintains a tight supply-demand balance.
Methyl Silicone Oil
- Domestic methyl silicone oil quotation: RMB 15,500–16,100/ton
Prices continue a steady upward trend.
Demand drivers:
- Stable demand from new energy, textile, and personal care sectors
- Increased PV-related consumption driven by export rush
- Improved downstream acceptance of higher price levels
Raw Silicone Rubber (High Consistency Rubber, HCR)
- Mainstream quotation: RMB 14,800–15,000/ton
Demand from:
- New energy vehicles
- Photovoltaic module applications
remains firm, supporting stable pricing.
Market Outlook: Stable Close Before Lunar New Year
Overall, the silicone market is closing the Lunar Year on a steady note.
Key characteristics include:
- Stable pricing across major product segments
- Tightening effective supply
- Resilient structural demand
- Low downstream inventory
The current tight supply-demand equilibrium is expected to consolidate further after the holiday, laying a solid foundation for post-festival market recovery and restocking activity.
In summary, the organosilicon industry enters the Spring Festival with a fundamentally balanced and stable structure, signaling a controlled and orderly transition into the new trading cycle.
