Recently, the organic silicon market has witnessed a significant change with the price of DMC (Dimethyl Silicone Cycle) on the rise, attracting widespread attention from both within and outside the industry. According to data from BaiChuan YingFu, on February 12, 2025, some companies increased the price of DMC by 300-800 yuan per ton to around 13,400-13,800 yuan per ton. This price increase is not only a reflection of the changes in market supply and demand but also closely related to the overall development trend of the industry.

Multiple Factors Behind the Price Increase

Supply-side Restrictions: Many monomer plants plan to conduct maintenance or reduce production by 10%-20%, which helps to ease inventory pressure. Against the backdrop of industry consolidation and market regulation, some companies choose to reduce production to stabilize market prices. This "self-disciplined production reduction" consensus has effectively reduced the market supply and provided strong support for the price increase. At the same time, the constraints on raw material supply have also had a certain impact on production, further intensifying the supply tension. Demand-side Recovery: The restocking by downstream mixing rubber companies has driven purchases, but the overall willingness to chase high prices remains cautious. With the steady recovery of the domestic real estate industry and the rapid development of emerging industries such as photovoltaics and new energy vehicles, the demand for organic silicon continues to grow. In addition, the rapid recovery of overseas market demand has also brought more orders to companies. Although downstream companies showed a certain degree of wait-and-see attitude at the beginning of the price increase, the market purchase activity is expected to further increase with the gradual release of demand.

Market Impact and Industry Response

Impact on Downstream Companies: The increase in DMC prices has led to an increase in production costs for downstream companies. For enterprises relying on organic silicon raw materials, how to maintain product competitiveness under the rising costs has become an urgent problem to solve. Some companies may respond to cost pressure by optimizing production processes and increasing product added value. At the same time, downstream companies will also pay more attention to the timing of raw material purchases and inventory management to reduce the risks brought by price fluctuations. Changes in Industry Competitive Landscape: After the most recent round of strong expansion cycle, there are no clear new capacities in the organic silicon industry in the coming years, and the industry competitive landscape tends to be stable. Against this backdrop, leading enterprises can maintain relatively stable profitability in price fluctuations with their scale advantages and market control. Small and medium-sized enterprises, on the other hand, need to continuously improve their own technical level and product quality to occupy a place in the market. Industry consolidation and reshuffling will further accelerate, and market resources will be concentrated in advantaged enterprises. Capital Market Response: The increase in DMC prices in the organic silicon industry has also attracted the attention of the capital market. The stock prices of related companies have fluctuated to a certain extent, and investors' enthusiasm for investing in the organic silicon industry has increased. Industry insiders believe that with the improvement of industry prosperity, organic silicon companies are expected to achieve dual growth in performance and stock prices. However, investors also need to rationally view market changes and pay attention to the long-term development potential of enterprises and the overall industry trend.

Future Market Outlook

Short-term Trend: In the short term, DMC prices may remain stable to digest the increase. The market needs some time to adapt to the current price level, and companies will also adjust production and sales strategies according to market feedback. At the same time, the purchasing rhythm and inventory situation of downstream companies will also have an impact on short-term prices. If downstream companies purchase intensively, it may push prices further up; on the contrary, if the purchasing strength is insufficient, prices may experience a small callback. Medium and Long-term Trend: In the medium and long term, due to the end of the capacity cycle and the growth of demand in emerging fields, the industry prosperity is expected to continue to recover. With the recovery of the global economy and the rapid development of emerging industries, the organic silicon market will usher in a broader development space. Companies need to seize market opportunities, increase R&D investment, expand application fields, and increase product added value. At the same time, the industry also needs to strengthen self-discipline to avoid malicious competition and jointly promote the healthy development of the organic silicon industry. The increase in DMC prices is a comprehensive reflection of the changes in market supply and demand and the development trend of the industry. For companies, it is both an opportunity and a challenge. How to maintain competitiveness in market fluctuations and achieve sustainable development is a problem that every company needs to think about. And for the industry, it also needs to continuously optimize resource allocation and improve the overall development level under the role of market mechanisms.