Dow Chemical recently notified its partners in Greater China that it will implement a price increase of 5% to 15% on its silicone product series, effective March 27, 2026. The adjustment covers a wide range of products, including vinyl silicone oil, dimethyl silicone oil, and raw gum. This marks the third price adjustment by Dow in recent months, following a 10%-20% hike in December 2025 .

This price surge is occurring against a backdrop of complex supply chain dynamics. While global demand for high-performance silicone materials is rising due to 5G infrastructure and EV battery thermal management, the supply side faces pressure from environmental regulations and raw material costs.

Meanwhile, the Chinese domestic market is undergoing a structural shift. As of April 1, 2026, China has canceled the 13% export tax rebate for primary shaped polysiloxane, which includes vinyl silicone oil . This policy change has effectively raised the export cost baseline for Chinese manufacturers by approximately 1,600 yuan per ton.

“The cancellation of tax rebates forces Chinese suppliers to stop competing solely on price,” said an industry analyst. “It pushes them toward high-end specialization. In the long run, this reduces the global supply of cheap, low-grade oil and justifies a global price increase.”

Despite the cost pressures, the market outlook remains robust. QYResearch data indicates that the global vinyl silicone oil market was valued at approximately $1.418 billion in 2025 and is projected to hit $1.847 billion by 2032 . The compound annual growth rate (CAGR) is expected to remain steady at 3.9%, driven by demand for Liquid Silicone Rubber (LSR) and High-Temperature Vulcanized (HTV) rubber in automotive and electronics applications.