Recently, there has been a huge uproar in the silicone market. The DMC quotation of leading enterprises in the wind vane industry fell to 14000 yuan/ton, and products such as 107 rubber, raw rubber, dimethyl silicone oil, and mixed rubber were all reduced by 500 yuan/ton. The DMC transaction price dropped sharply to around 13000 yuan/ton within the week, and some core customers with large inventories even had transaction prices as low as 12800-12900 yuan/ton. Behind this price storm is the implementation of the United States' 104% tariff on multiple silicone products.
Such high tariffs undoubtedly bring enormous pressure to domestic silicone enterprises. The surge in tariffs means a significant increase in export costs, and the original price advantage is completely lost. In the fields of solar panels and polycrystalline silicon, Chinese new energy companies have already suffered from high tariffs imposed by the US "double reverse" investigation. The new tariffs are even more severe, and the competitiveness of Chinese solar products in the US market will be severely affected. The furniture and home goods industry is also not optimistic. As one of the main commodities exported by China to the United States, the export value will reach about 35 billion US dollars in 2024. However, the newly increased tariffs will completely offset the price advantage of Chinese furniture, and the profit margin will be further compressed. The field of electronic products has been severely affected. In 2024, the total amount of electronic products exported from China to the United States will exceed 150 billion US dollars. The addition of high tariffs will seriously damage the price advantage of these products in the US market, and the number of orders may sharply decrease.
However, there is still a glimmer of hope in this tariff storm. The United States has exempted tariffs on primary forms of organosilicon (such as polydimethylsiloxane), but deep processed organosilicon products such as silicone products, silicone adhesives, and silicone oils are not on the exemption list. This means that there are not many short-term options for organic silicon export companies to respond, but in the long run, global demand and supply will eventually reconnect.
Industry insiders believe that this wave of tariff adjustments will completely reshape the competitive environment of the silicone market. Low price white brand homogeneous products will lose their advantage, while high value-added brand products will be more competitive. Overseas enterprises need to rely on technological innovation and service to form differentiation and accelerate the pace of brand upgrading. Only enterprises with technological advantages can stand out in fierce market competition and win more market share.
In the face of this tariff storm, Chinese silicone companies need to actively respond while keeping an eye on the world. Although facing significant pressure in the short term, in the long run, the demand and supply in the global market will eventually return to balance. Chinese organic silicon enterprises should seize the opportunity, increase technological innovation, improve product quality and service level, accelerate the pace of brand upgrading, in order to cope with the challenges and opportunities of the future market.