"In the first month of the lunar calendar, the sun rises from the jade-like tube, and the buds of flowers and the willow branches are still in the early stage of spring." In the new year, Silicone officially embarks on its new journey in 2026. Looking back on the tumultuous journey of 2025, despite the market prices plummeting to a low amidst the overall economic downturn, under the national call to "anti-overcompetition", silicone enterprises took proactive measures such as reducing supply and actively clearing inventory, regrouping and turning the tide. Now, the market prices of silicone have returned to a healthy competitive path, and the industry is moving towards high-quality development at an orderly and stable pace.
After the holiday, the silicone market is in a transitional stage between stable digestion and potential price increase. On the market front, monomer manufacturers continue to advance emission reduction arrangements. While stabilizing product prices, they actively digest pre-holiday pre-sale orders to maintain market share and profit margins, with a strong overall willingness to support prices. Midstream and downstream enterprises generally remain on the sidelines. Since most companies had already arranged orders for January before the holiday, their willingness to replenish stocks is relatively limited at present. Moreover, with stable raw material prices, midstream and downstream enterprises are optimistic, and their purchases are mainly driven by rigid demand. However, there is an expectation of a potential price increase in raw material DMC. Amid concerns about rising costs, some companies still follow up with a small number of new orders, and their acceptance of higher prices has also increased.
Overall, the transactions in the silicone market are still primarily driven by rigid demand. With competition becoming more rational, prices are gradually recovering towards a reasonable range. It is expected that DMC prices will remain stable this week. If the emission reduction policy is fully implemented, the market may witness a tentative uptrend.
Industrial silicon: On the supply side, the number of furnaces operating in major factories in Xinjiang remains stable, while some silicon factories in the southwest region continue to reduce production, maintaining overall production capacity at a medium level. On the demand side, polysilicon production has declined, and most enterprises in the silicone industry are operating at reduced capacity, resulting in limited demand for silicon metal. Overall, the inventory pressure on industrial silicon has not eased, and there is a lack of sustained drivers for price appreciation. Currently, both futures and spot prices continue to be weak. As of January 5th: the closing price of the main futures contract for si2605 is 8,730 yuan/ton; the quotation for 421# silicon metal is 9,800-10,200 yuan/ton. It is expected that the fundamentals of industrial silicon will continue to exhibit a weak supply and demand pattern in January, with the market maintaining a weak and volatile trend. In terms of operating rates: the operating level of monomer factories at the beginning of the month may continue the pattern seen at the end of last year, with operating rates maintained at around 65%. However, the upcoming meeting of actual controllers of monomer factories in Hangzhou is expected to increase emission reduction efforts once again in order to accelerate inventory reduction and profit recovery, providing support for market prices.