Recently, according to Baichuan Yingfu data, during the period of 2019-2024, the domestic silicone DMC production capacity has jumped sharply from 1.515 million tons/year to 3.44 million tons/year. However, the subsequent new production capacity of domestic silicone DMC is only the 100,000 tons/year project planned and constructed by Inner Mongolia Xingfa Technology Co., Ltd., which is expected to be completed and put into production in June 2025. This trend of slowing capacity expansion indicates that the supply and demand pattern of the silicone industry is about to usher in a turning point.

Since the second half of 2024, domestic silicone prices have fluctuated relatively steadily, basically at the historical bottom level, and the corresponding gross profit is still in a loss state. However, as the new production capacity on the supply side is limited, the demand side is gradually increasing, and there is very limited room for further decline in silicone prices and profitability, which is expected to be repaired in the future. In terms of downstream demand, although the construction industry has declined, central and local policies have continued to increase since the second half of 2024, and the market space for silicone sealing materials in the construction field is still expected to expand further, and the market share of high-end building sealants may also increase accordingly. At the same time, photovoltaics, new energy vehicles and other fields are developing rapidly, and the demand for silicone materials has risen rapidly. Moreover, the iterative upgrades of products in these industries have put forward higher requirements for material performance, and the demand for high-end silicone materials will also grow simultaneously, further broadening the market space for silicone materials in emerging fields.

Industry insiders analyzed that the improvement of the supply and demand pattern of the silicone industry will bring new development opportunities for related companies. Investors can pay attention to companies such as Hesheng Silicon Industry, Xingfa Group, Xin'an Shares, Sanyou Chemical, Dongyue Silicon Materials on the silicone production side, and Huitian New Materials and Sibao Technology on the silicone application side. The subsequent price trend of the silicone market and the profitability of enterprises are worthy of continued attention.