Recently, Shin-Etsu Chemical, a major Japanese materials manufacturer, issued an announcement stating that it would implement a global price adjustment for all its silicone products effective 1 May, with increases of over 10%, the exact percentage varying by product. On 24 April, Elkem also announced a comprehensive price increase for its silicone products for customers in Europe and the Americas, ranging from 10% to 30%. With these two international leaders raising prices simultaneously, coupled with the domestic industry’s ‘anti-over-competition’ production cuts, a surge in exports and the expansion of emerging demand, the silicone market has witnessed a global synchronized price rise. The core product DMC has seen a half-yearly increase of over 30%, enabling the industry to fully emerge from the quagmire of losses and enter a new phase of profit recovery and structural upgrading.

I. Price Trends: Over 30% surge in six months, with prices remaining firm at April highs

According to data from SunSirs, the price of silicone DMC has risen steadily since its low of 11,300 RMB/ton in October 2025, reaching a benchmark price of 14,700 RMB/ton on 29 April 2026, a cumulative increase of 30% over six months. In April alone, the price rose by approximately 700 RMB/ton, a 5% increase, demonstrating a trend that is stable yet firm.

107 Silicone Rubber: The average price in April was 15,000–15,500 RMB/ton, showing a synchronous strengthening;

Methyl Silicone Oil: Quoted at 16,000–17,800 RMB/ton, with a monthly increase of nearly RMB1,000. Prices exhibited a step-like upward trend and high-level volatility, with industry profitability fully recovering.

II. Core Reasons for the Rise: Bilateral Improvement in Supply and Demand, Driven by Global Resonance

Domestic industry-led voluntary production cuts have resulted in a significant contraction in supply. Since November 2025, the industry has initiated a coordinated ‘anti-overcapacity’ production reduction campaign, with operating rates falling from peak levels to 60–65%, effectively reducing capacity by approximately 35%. With no new capacity coming online in April 2026, coupled with maintenance at some facilities, the spot market remains tight, prompting companies to hold firm on prices and withhold sales.

Overseas Capacity Exits + Price Hikes by International Giants Tighten Global Supply Dow Chemical has shut down 145,000 tons of overseas capacity, whilst Shin-Etsu and Elkem have successively raised prices by 10%–30%. The restructuring of the global silicone supply landscape has opened up upside potential for domestic prices and further enhanced export competitiveness.

Explosive export growth, strongly supported by overseas demand. Customs data shows:

Cumulative exports of silicones (primary-form polysiloxanes) from January to March 2026 reached 206,000 tons, up 52.99% year-on-year;

Exports for March alone reached 98,200 tons, up 84.62% month-on-month and 87.57% year-on-year;

Exports for the same period (January–March) in 2025 stood at 134,700 tons, representing a mere 10.41% year-on-year increase, whereas this year’s growth rate has surged significantly. India, South Korea and Vietnam are the primary destinations, with pent-up overseas demand being released in concentrated waves, effectively absorbing domestic supply.

Emerging demand has surged, and the demand structure continues to optimize. Demand for photovoltaic adhesives, new energy vehicle seals, AI server immersion coolants and electronic-grade silicone oil is growing rapidly, with the photovoltaic sector up 15% year-on-year and the new energy vehicle sector up over 20%. Demand for traditional building materials remains stable, whilst emerging industries have become the core growth engine, significantly enhancing demand resilience.

III. April Supply Landscape: Continued Production Cuts, Low Inventories, and a Stable Tight Balance

Domestic effective silicones capacity remains stable, with the industry strictly adhering to production cut agreements. Operating rates have been maintained at a low level of 65%–68%, resulting in a year-on-year decline in output. Social inventories are at their lowest level in nearly three years, whilst manufacturers’ pre-sale orders are fully booked, generally extending into mid-to-late May, leading to tight spot market supply. Overseas, with underutilized production facilities in Europe, the US, Japan and South Korea, import volumes remained low. The domestic market shifted from a net import to a net export position, providing strong support from the supply side.

IV. Price Transmission Logic Across the Supply Chain

Upstream industrial silicon: Quoted at 9,300–10,000 RMB/ton, with stable cost support providing a floor; the cost advantage of integrated enterprises is becoming increasingly evident;

Silicone DMC: Supply contraction + increased exports + cost support have driven prices to rise strongly, with processing margins recovering significantly and profits for leading enterprises surging;

Downstream Compounded Rubber, Sealants and Photovoltaic Adhesives: Cost pass-through has been smooth, with product prices rising in tandem. Premium pricing is evident for high-end electronics and AI liquid cooling materials, with industry profits concentrating from the upstream to the midstream, and then passing through to high-value-added downstream sectors.

V. Impact on the Domestic Market

Short term (1–2 months): International price hikes combined with a tight domestic supply-demand balance will see DMC stabilize at 14,500 b, trading at elevated levels with a bullish bias, whilst corporate profits continue to improve. Against a backdrop of tightening global supply, improving domestic supply-demand dynamics and ongoing structural optimization, the silicones market is operating steadily at high levels. Profit recovery and industrial upgrading are proceeding in tandem, making this a high-growth sector within the chemicals industry.

SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.