The supply and demand landscape is undergoing a transformation. The silicone oil additive industry is moving away from the low-price competition and towards value growth. 

1.Supply-side optimization and adjustment: Industry inventory returns to a reasonable range
After years of extensive expansion, the silicone oil additive industry is now undergoing a deep supply-side optimization. Inefficient production capacity is gradually being eliminated, and the imbalance between market supply and demand has been effectively alleviated. Previously, the industry had excessive homogeneous production capacity, leading to low-price competition, profit compression, and other problems. With stricter environmental regulations and the implementation of energy consumption dual-control policies, a number of small and medium-sized production capacities with outdated processes and non-compliant environmental standards have voluntarily shut down and withdrawn. The overall industry operating rate has remained within a reasonable range. At the same time, the leading production capacity focuses on technological upgrading, postpones the expansion of low-value-added conventional products, and shifts to high-end customized production layout, further optimizing the supply structure. As of the first quarter of 2026, the overall inventory level of the industry has decreased by 31% compared to the same period last year. The supply-demand relationship has gradually returned to a favorable track, laying the foundation for the industry to break free from low-price competition and enhance its profit margins. 

2. Cost end support strengthens; product prices stabilize and rebound
The fluctuations in upstream raw material prices and the increase in production factor costs have become an important support for the stabilization and rebound of silicone oil additive product prices. As the core raw material, the organic silicon monomer, is affected by the rising prices of raw materials and energy, as well as the industry's measures to limit production and maintain prices, market quotations have continued to rise, directly pushing up the production costs of silicone oil additives. At the same time, the increase in rigid expenditures such as environmental protection governance, equipment upgrading, and inspection certification has further raised the operating costs of enterprises. Under the support of these cost factors, the industry has bid farewell to the low-price dumping model. The prices of regular products gradually return to a reasonable profit range, and the prices of high-end modified silicone oil and special functional additives remain stable and rise. The overall profit level of the industry has significantly recovered compared to the same period last year, and the business pressure of enterprises has been effectively alleviated. 

3. Demand Segmentation Is Clearly Defined: Demand in High-End Sectors Grows Against Expectations
Currently, the demand for silicone oil additives shows a significant differentiation trend. The demand in traditional textile and daily chemical sectors remains steadily growing, with a growth rate of around 5% to 7%. However, in emerging sectors such as new energy, electronic information, and high-end coatings, the demand has experienced explosive growth, becoming the core driving force for industry growth. In scenarios such as AI data center liquid cooling, photovoltaic component sealing, and battery encapsulation for new energy vehicles, high-performance silicone oil additives have seen a continuous increase in market penetration due to their excellent thermal conductivity, insulation, and aging resistance properties. In the high-end coatings sector, the demand for anti-graffiti and weather-resistant modified silicone oil additives has grown by more than 15%, accelerating the pace of replacing imported products. The optimization and upgrading of the demand structure have driven the industry to shift from scale expansion to quality and efficiency improvement, with the proportion of high-value-added products continuously increasing. 

4. Industry consensus converges to build a new ecosystem of fair competition
In the face of market changes, enterprises within the industry have gradually abandoned the mindset of low-price competition and shifted to a comprehensive competition based on technology, quality, and service. A favorable competition ecosystem is accelerating its formation. Through the leadership of industry associations, they have established unified product quality standards and environmental protection regulations to prevent inferior products from entering the market. Enterprises strengthen technical exchanges and industrial chain collaboration, and carry out cooperation around raw material guarantee, process optimization, and application expansion, achieving mutual benefit and win-win results. At the same time, the industry increases investment in brand building, enhances the market recognition and premium pricing ability of domestic silicone oil additives, and promotes the entire industry towards standardization, high-endization, and refinement, further consolidating the foundation for long-term sustainable development.