The high-end transformation has been accelerated, and hydroxyl silicone oil has achieved a leap in its position in the global supply chain

1.The core technology has been broken through, and the product precision has reached the world's strict standards
As a key intermediate in the silicone material system, hydroxyl silicone oil has completed its strategic transformation from a basic chemical raw material to a high-end functional material after more than three decades of development. Recently, the technological iteration in the industry has accelerated. Core processes such as high vacuum continuous polycondensation, precise molecular weight control, and green catalysis have been successively broken through. As a result, the hydroxyl content deviation of the product has been controlled within ±0.02%, and the metal ion residue has been reduced to below 3 ppm. This has successfully met the strict requirements of high-end scenarios such as semiconductor packaging and OLED optical adhesives. It has broken through the previous technological barriers in the high-end field.


2. The application structure reshaping has made the electronics field the main force of demand
The market demand structure is undergoing fundamental changes. The proportion of traditional applications is continuously shrinking, while the demand in high-end fields is rapidly rising. According to data from industry associations, the apparent consumption of hydroxyl silicone oil reached 96,000 tons in 2024, with the electronic and electrical sector accounting for 31.2%, surpassing the construction sector for the first time to become the largest application sector. The proportion of demand related to new energy vehicles reached 18.8%, and the proportion in the medical and health sector rose to 12.5%. The combined proportion of the three high-end fields exceeded 60%, marking the official shift of the industry's application focus to high value-added fields.


3. The export performance was outstanding, with domestic high-end products surpassing those of Japan and South Korea
The domestic hydroxyl silicone oil has significantly enhanced its influence in the global high-end supply chain. In 2024, the export of high-end products increased by 37.6% year-on-year, achieving net exports to the Japanese and South Korean markets for the first time, thus reversing the long-standing reliance on imports for high-end products. At present, the average import price of high-end hydroxyl silicone oil is as high as 42,300 yuan per ton, and the import dependence still reaches 32%. However, with the continuous upgrading of domestic technology, the space for import substitution is gradually expanding, becoming the core driving force for industry growth.


4. The capacity structure is differentiated, with a significant gap between supply and demand in the high-end sector
By the end of 2024, the effective annual production capacity of hydroxyl silicone oil across the country reached 128,000 tons, with an average annual compound growth rate of 19.4%. However, structural contradictions were prominent. The capacity utilization rate of mid-to-low-end products is only 75%, the inventory turnover days have risen to 41 days, and the price has dropped by 23.2% compared with the peak in 2022. However, high value-added products such as medical-grade and optical-grade ones remain in short supply, and the gross profit margin of functional modified products generally exceeds 45%, becoming the focus of enterprises' layout.