Will Silicone Oil Be in Short Supply in 2026? Should Buyers Lock Prices?-Iota

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News > Dynamic industry > Will Silicone Oil Be in Short Supply in 2026? Should Buyers Lock Prices?

Will Silicone Oil Be in Short Supply in 2026? Should Buyers Lock Prices?

Since November 2025, the direction of the silicone industry has shifted dramatically. Led by top players such as Hesheng Silicone, Dongyue Silicones, Xin’an Shares, and Xingfa Group, the industry held three closed-door meetings and reached a self-regulatory consensus to cut production by 30%—the first real “anti-overcompetition” action in five years. As a result, DMC (dimethylcyclosiloxane mixture) prices rebounded strongly from a low of 11,000 RMB/ton to over 13,700 RMB/ton, and market sentiment shifted from “excess panic” to “tight supply.”

For downstream users, a pressing question arises: Will silicone oil run short? Should prices be locked in now?

The answer is quickly transmitting through the supply chain. Silicone monomers are the source raw material for all silicone oils, and tightening supply directly pushes up base siloxane costs. According to forecasts from Eastmoney and Future Intelligence, China will face a 294,000-ton supply gap for silicone monomers in 2026, with no large-scale new capacity coming online—only a small unit from Inner Mongolia Xingfa, insufficient to offset capacity exits.

This means not all silicone oils will be scarce, but structural shortages are certain.

General-purpose 201 silicone oil: Short-term price rises due to cost, but sufficient capacity and low risk of shortage.
High-end grades (e.g., electronic-grade phenyl silicone oil, medical-grade hydroxy silicone oil, low-cyclic linear silicone oil): Rely on high-purity monomers and long production cycles, with raw material quotas prioritized for top customers. Smaller suppliers may face “no material, no delivery” situations.

A procurement manager at an East China personal care OEM said: “In January, suppliers still provided quarterly quotes; by early February, it switched to weekly settlement with a 50% prepayment required.” Another electronic adhesive company revealed that its silicone oil supplier, limited by DMC quotas, has paused new orders to prioritize chip packaging customers.

Facing potential price increases and extended lead times in Q2, industry experts recommend a three-step strategy:

Identify product type: Modified, high-purity, or custom silicone oils are likely in the “tight supply tier.”
Evaluate price-locking necessity: For stable-volume, margin-sensitive products, negotiate 3–6 month price-lock agreements.
Verify supplier capability: Check monomer self-sufficiency, real inventory, and fulfillment history to avoid “verbal promises but actual shortages.”

“This is not hype, but supply-demand rebalancing,” said a senior silicone trader. “In 2026, suppliers with raw materials pick customers; those without wait in line.”

As the industry shifts from “competing on price” to “competing for resources,” proactively securing the supply chain may be wiser than waiting for lower prices.

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