Multiple Signals in Resonance: The Silicone Industry Enters a Critical Phase of “Technological Breakthrough + Market Restructuring”-Iota

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News > Dynamic industry > Multiple Signals in Resonance: The Silicone Industry Enters a Critical Phase of “Technological Breakthrough + Market Restructuring”

Multiple Signals in Resonance: The Silicone Industry Enters a Critical Phase of “Technological Breakthrough + Market Restructuring”

In September 2025, the silicone industry is undergoing a deep restructuring under the convergence of rising prices, technological breakthroughs, policy adjustments, and corporate strategies. From disruptive laboratory innovations to shifts in market supply and demand, the industry is gradually moving beyond the shadow of previous overcapacity and entering a new stage of high-quality development.

Price Stabilization and Recovery, a Turning Point in Supply and Demand
The domestic silicone market has recently shown a moderate upward trend, with continuous small increases in the price of the key intermediate DMC. As of September 19, the average domestic DMC price was 10,900 RMB/ton, up 50 RMB from the previous trading day; previously, on September 17, it had risen 100 RMB in a single day. The main driver behind the price recovery is structural adjustments on the supply side: leading companies have ample preorders, tight production schedules have limited spot availability, and rising cost support has strengthened firms’ willingness to maintain prices.

From a fundamental perspective, the current price stabilization reflects a substantial improvement in the supply-demand balance. Since the second quarter of 2025, leading companies such as Hesheng Silicone and Xin’an Chemical have actively adjusted production capacity through cuts and maintenance, lowering operating rates and shortening inventory cycles. Meanwhile, overseas firms like Wacker and Ternuo have accelerated the shutdown of energy-intensive lines, further reducing effective global capacity and gradually revealing a supply gap, laying the foundation for price recovery.

Technological Breakthroughs Published in Top Journals, Major Advances in Circular Economy
Bluestar Aiken, a subsidiary of China National Chemical Corporation, in collaboration with an international team, has achieved a disruptive breakthrough in silicone recycling technology, with results recently published in the prestigious journal Science. The technology enables “low-temperature, high-efficiency” recycling of silicones: under mild conditions of 40°C, various silicone wastes can be converted into chlorosilane feedstock using a gallium catalyst in combination with boron trichloride. The reaction rate is millions of times faster than traditional methods, with a yield exceeding 90%.

The core value of this technology lies in solving a long-standing recycling challenge for the industry. Whether silicone oil, silicone rubber, complex industrial wastes containing fillers and additives, or end-of-life crosslinked elastomers, all can be efficiently degraded. The recycled chlorosilane can be directly reused in silicone production, forming a complete circular chain. This has the potential to fundamentally change the industry’s reliance on incineration and landfilling for silicone waste, providing key support for carbon reduction. Previously, Aiken successfully validated a mechanical recycling process for high-viscosity rubber with a reincorporation rate exceeding 50%. The combination of multiple recycling technologies is accelerating the industry’s transition toward a circular economy.

In the high-end product segment, technological breakthroughs are also frequent. Hesheng Silicone published research on hybrid silicone rubber, breaking foreign technological monopolies through chemical modification; Jianghan New Materials successfully developed high-end epoxy silanes, applied in 3C digital products and EV batteries, filling a domestic gap.

Policy and Capital in Sync, Deep Adjustment of the Industry Ecosystem
On the policy front, recent changes present both opportunities and challenges. Adjustments to U.S. tariffs are a key variable affecting the export market: as of September 8, primary polysiloxanes were removed from the duty-free list, with a 10% reciprocal tariff imposed on Chinese exports, potentially rising to 34% after November 2025. As China is the largest exporter of this product to the U.S. (accounting for 27.4% of imports from January to July 2025), this policy will exert pressure on relevant export companies.

Domestic policy continues to guide industry optimization and upgrading: regions such as Yunnan and Xinjiang are promoting a shift toward more efficient and greener supply structures through production restrictions and the elimination of outdated capacity. The alignment of policy guidance with market demand is attracting capital investment. Recently, Jinhua New Materials launched a public offering on the Beijing Stock Exchange; if the over-allotment option is fully exercised, 682 million RMB could be raised, mainly for high-end coupling agent projects and research institute construction. GCL Technology received 5 billion RMB from Middle Eastern investors, focusing on silane gas and perovskite-related business, providing momentum for technological innovation.

Corporate-level strategic adjustments are also active. Finotec Hangzhou plans to commission the second phase of its 160,000-ton silicone sealant project by year-end, with a projected annual output value of 1.8 billion RMB. Shin-Etsu Silicone (Pinghu) received environmental approval for a 5,000-ton annual production project. Xin’an Co. signed a strategic agreement with U.S. Valtris to collaborate in the flame retardant field. Meanwhile, Aiken ASA is negotiating exclusive sales rights for its silicone products, signaling a gradual industry consolidation.

Emerging Demand as a New Growth Engine
While demand in traditional construction and electronics remains stable, renewable energy and high-end manufacturing are becoming core drivers of industry growth. In the EV sector, silicone usage per vehicle has increased significantly compared with ICE vehicles, particularly for battery potting compounds and electronic control system seals. In photovoltaics, markets for module encapsulants and frame adhesives are rapidly expanding, with global demand expected to exceed 450,000 tons in 2025. In healthcare, biocompatible liquid silicone applications in artificial organs and surgical instruments are accelerating.

In response to industry changes, companies along the supply chain are actively preparing. From October 29–31, the “Nanometer Silica Material Technology and Application Exchange Conference” will be held in Shenzhen, with participation from global giants such as Wacker and Evonik. Concurrently, multiple events on silicone fine chemicals technology will be held. In addition, the group standards “Diethylaminomethyltriethoxysilane” and “Thermally Conductive Silicone Gel for Batteries” have been officially published and will take effect in December 2025, providing standard support for high-quality industry development.

Industry experts note that with the implementation of technological breakthroughs, optimization of supply and demand, and the release of emerging demand, the trend of profitability improvement in the silicone industry is clear. In the short term, attention should be paid to inventory digestion and overseas policy changes. In the future, companies with technological advantages, circular economy strategies, and global production capacity deployment will gain a leading position in the industry’s restructuring.

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