Guosen: The organic silicon monomer plant plans to coordinate production cuts, and prices are expected to enter an upward trend.

Guosen released a research report stating that the industry operating rate in January 2025 was 80.69%, reaching the annual high point, and subsequently maintaining around 70%. In October 2025, the operating rate for silicone was 70.08%. The recent inventory of silicone intermediates has not been impacted by new production capacity, remaining relatively stable. According to Sublime China Information data, the average domestic price of DMC was 12,500 yuan/ton, an increase of 1,000 yuan/ton from the previous working day, with individual factories planning to collectively reduce production by 30%. As production reductions gradually take effect, product prices and industry average profits are expected to turn positive. Guosen's main points are as follows: Demand side: Domestic demand continues to increase, while overseas exports have slowed down due to a high base last year. The domestic consumption of silicone intermediates in the first three quarters of 2025 was 1.5128 million tons, a year-on-year increase of 19.66%. The export volume of silicone intermediates in China in the first three quarters of 2025 was 420,100 tons, with a year-on-year growth rate falling to 2.30% due to a high base effect. Supply side: The peak of expansion has passed, and the supply situation is turning around. According to Baichuan Yingfu data, China's production capacity of silicone intermediates was 1.675 million tons/year in 2020, increasing to 3.44 million tons/year in 2024, with an average annual compound growth rate of 19.71%. Currently, the concentration of silicone intermediate production capacity in China is relatively high, with Hoshine Silicon Industry accounting for 26%, and Blue Star Xinghuo and Shandong Dongyue Silicone Material each accounting for 10%, CR5 exceeding 60%. In January 2025, the industry operating rate was 80.69%, reaching the annual high point, and subsequently maintained around 70%, with the silicone operating rate being 70.08% in October 2025. The recent inventory of silicone intermediates has not been impacted by new production capacity, remaining relatively stable. Product prices are at historically low levels and are expected to turn around with coordinated production reductions. In 2022, the silicone industry expanded significantly, and with factors such as the downturn in the real estate industry and repeated outbreaks of the epidemic, the supply-demand situation for silicone deteriorated significantly, industry profits turned negative and have been maintained until now. According to Zhuochuang News, individual silicone factories plan to collectively reduce production by 30%, further reducing supply. On November 13, the average price of DMC was 12,500 yuan/ton, an increase of 1,000 yuan/ton from the previous working day. As production reductions gradually take effect, product prices and industry average profits are expected to turn positive. Risk warning: Significant increases in raw material prices; significant fluctuations in silicone product prices; industry new production capacity exceeding expectations; downstream demand and exports lower than expected.