1. The Evolution of Capacity Structure: From Rapid Expansion to Refined Cultivation

After years of rapid expansion, China's silicone industry will completely bid farewell to the old growth model driven by new capacity additions in 2026. The core issue for the industry is no longer "how to expand scale" but "how to optimize the existing stock." The era of large-scale capacity commissioning has ended, and the market has entered a new stage focused on optimizing, consolidating, and improving the efficiency of existing assets. This marks a fundamental shift in competitive logic. Competition among enterprises will evolve from simple price wars to a comprehensive contest encompassing cost control capabilities, supply chain synergy efficiency, and depth of customer service.

2. Reconstruction of the Cost Defense Line: Integration and Resource Control Become Key

Against the backdrop of generally pressured industry profits, building a solid cost defense line has become a cornerstone for enterprise survival. In 2026, companies possessing an integrated "ore (silica) - power - silicone" industrial chain will demonstrate significant resilience. This model not only effectively hedges against raw material price fluctuations but also secures a stable and low-cost power supply through self-sufficient energy generation—crucial for the energy-intensive silicone production process. Therefore, the degree of control over upstream key resources will become an important metric for differentiating competitive tiers. Isolated manufacturers lacking resource security will face greater operational pressures.

3. Evolution of Policy Direction: From Encouraging Exports to Driving Upgrading

A key policy expectation is shaping the industry's future in 2026: traditional incentive policies for exporting primary forms of silicone products may undergo gradual adjustment. This shift sends a clear signal that the focus of national industrial policy is moving from encouraging the export of basic raw materials to guiding the industry up the value chain. In the short term, this may cause adjustment pains for some enterprises reliant on exporting primary products. In the long run, however, it will powerfully drive capital and R&D efforts toward higher value-added downstream sectors, such as specialty silicone oils, high-performance silicone rubbers, and electronic- and medical-grade products, thereby promoting structural upgrading across the entire industry.

4. Shift in Demand Drivers: Emerging Sectors Take the Growth Baton

Structural changes in market demand are the fundamental driver of industry transformation. Growth in traditional pillar sectors like construction sealants is stabilizing, while new energy and advanced manufacturing are becoming the undeniable primary growth engines. The continued expansion of the photovoltaic industry drives significant demand for module sealants and encapsulant materials. The proliferation of new energy vehicles significantly increases the consumption of high-performance silicone rubbers used in battery pack sealing and high-voltage cable insulation. Furthermore, the innovative development of frontier industries such as 5G communications, AI hardware, and flexible electronics continuously poses higher, more customized performance requirements for silicone materials, opening up entirely new spaces for value growth in the industry.