In 2025, the silicone oil market presented a situation of both strong supply and demand but structural differentiation. In terms of production capacity, domestic expansion continues. For instance, the main building of Zhejiang Tiansi New Materials' "Annual 20,000-ton silicone oil and Deep Processing Project" was capped this year, and it is expected to start trial production by the end of the year. Wanhua Chemical plans to expand its annual production capacity of polydimethylsiloxane (PDMS, a type of silicone oil) from 9,000 tons to 29,000 tons. All signs indicate that the overall production capacity of the industry is steadily increasing. According to relevant predictions, China's silicone oil production capacity will reach 5.5 million tons in 2025, with an output of approximately 4.8 million tons and a capacity utilization rate of 87.3%.
The demand side is equally strong. With the development of various industries, the demand for silicone oil is growing diversely. In the personal care sector, the market size is expected to reach 15 billion yuan in 2025, representing a 10% increase compared to 2024. This is attributed to consumers' pursuit of the efficacy of skin care products. Silicone oil has significant advantages in moisturizing and smoothing. In the electronics and electrical appliances industry, with the popularization of 5G communication and smart home appliances, the demand for it as an insulating and heat dissipation material is expected to reach 180,000 tons. The new energy vehicle industry is developing rapidly. The demand for functional silicone oil in batteries and insulating materials has increased significantly. The proportion of functional silicone oil in related applications of new energy vehicles will rise from 15% in 2025 to 25% in 2030.
However, there is a structural imbalance in the market. There is already an oversupply of construction-grade PDMS, while the gap in high-end silicone oil for electronics and medical use remains large. In 2023, China's import dependence on high-end PDMS reached 65%, with an annual import demand of approximately 80,000 tons. However, with the technological upgrading and capacity expansion of domestic enterprises, it is expected that import substitution will gradually be achieved in the high-end field in the future, optimizing the market supply and demand structure.