1. Supply
With the sharp rise in silicone prices at the end of 2021, a new round of capacity expansion in the industry has followed. The silicone industry will have a large amount of new capacity in 2022-2024, but the new capacity will slow down significantly in 2025. It is expected that the actual increase may be less than 500,000 tons. The peak of industry production has passed, and the competitive pressure on the supply side is expected to be alleviated.

2. Demand
Although real estate demand is under pressure, silicone is used as a new material in the lithium battery and photovoltaic fields. The compound growth rate of demand has reached 14% in the past five years. It is expected that the industry demand growth rate in 2025 may fall in the range of 5%-10%. Domestic demand and exports have grown steadily, and the new energy field has contributed the main increase. Photovoltaic installations and new energy vehicles use a large amount of silicone. At the same time, overseas silicone companies are facing cost and environmental pressures, and the overall production capacity has shrunk. The domestic silicone industry has cost advantages, and exports are expected to grow steadily in the future.

3. Overall market situation
In terms of supply and demand, silicone may improve marginally in 2025, the industry may recover, and the profit level may also be restored. However, the market still faces some risks, such as large fluctuations in raw material prices, downstream demand falling short of expectations, and industry expansion beyond expectations.