Xinhua Finance News: The European Union plans to expand its anti subsidy tax to plug-in hybrids, and plans to introduce a supply chain diversification tool and public procurement bill in September. By 2025, China's plug-in hybrid exports to Europe will increase by 155%, with pure electricity accounting for only 12% and market share rising to 4.5%. New regulations may impose additional taxes ranging from 7.8% to 35.3%, with the highest comprehensive tax rate exceeding 45%; Supply chain tools are planned to be limited to a single supplier. Chinese car companies will face three barriers: tariffs, supply chain compliance, and market access for public procurement.
Organosilicon Market Weekly Report (June 29 July 5, 2026): The game intensifies, with both price hikes and wait-and-see measures coexisting
Entering the first week of July, the silicone market continued its weak and stable wait-and-see trend, with overall weak transactions and a significant slowdown in the shipment pace of individual enterprises, resulting in a decline in actual transaction prices across the board. Previously, due to the off-season of terminals and the decline in exports, the focus of market transactions shifted significantly downwards. In mid June, the transaction prices of some core large players fell below the 14000 yuan/ton mark, and the industry began to fall into a vicious cycle of "bidding for orders".
It is worth noting that the "bidding for orders" expanded at the beginning of last week. The 40% production reduction plan, which was determined from June to August, failed to provide a bottom price, and the actual transaction price in the market once again fell. Some individual factories even secretly offered discounts for shipments due to heavy inventory backlog - the transaction price of DMC core large customers reached 12800-13000 yuan/ton at the beginning of last week. This reality forces the industry to re-examine the effectiveness of production reduction strategies.
On Friday, July 3rd, the silicone monomer factory held a critical meeting and made a significant decision. The meeting clearly stated that the price system of the entire product line will be moved up, and unprecedented supply contraction measures will be implemented simultaneously. The core points include:
In terms of pricing system, the DMC quotation has officially been pulled back to 14000 yuan/ton (acceptance of clean water), while 107 rubber, raw rubber, and methyl silicone oil have increased to 14600 yuan/ton, 14800 yuan/ton, and 15500 yuan/ton, respectively. The quoted price for hydrolysis material (line body) is 13800 yuan/ton, and the spot exchange transaction price is 100 yuan/ton lower than the acceptance price.
In terms of supply contraction, the industry's emission reduction efforts have significantly increased from 40% to 60%. This means that the industry's operating rate will be further compressed, aiming to repair the supply-demand imbalance through substantial supply contraction. The meeting will take "preventing the deterioration of price wars" as a key lever, not only to correct irrational competition in the market, but also to rebuild the foundation of trust during the industry downturn and promote the market to return to rationality.
From the perspective of industrial operation logic, this is not the first time that the silicone industry has made concerted efforts on the supply side. In November 2025 and January 2026, the industry held two meetings with actual controllers and reached a consensus. The operational logic of the industry is undergoing a substantial transformation, shifting from the previous zero sum competition of "price for quantity" to a benign and sustainable pattern relying on cost advantages.
Supply side continues to contract: According to industry data, the average weekly operating rate of organic silicon DMC last week was 61.79%, which remained stable compared to last week. The coordinated emission reduction policies in the industry continued to advance from June to August, coupled with centralized maintenance of multiple facilities in Hebei, Inner Mongolia, Yunnan and other places. Leading enterprises took the initiative to reduce their burdens, and the market supply showed a phased contraction. The inventory pressure of upstream individual factories has eased compared to the end of June. According to SMM data, the supply of DMC decreased by about 4% month on month in the previous week. As some individual enterprises in North China will enter annual maintenance shutdowns, the supply side is expected to further shrink.
The demand side is still showing weakness: the overall demand side is weak during the traditional off-season in July. At present, the buyer's market dominates, and downstream customers negotiate and purchase based on their purchasing volume, with a focus on low prices. Downstream small and medium-sized enterprises as well as large households are observing the price trend, only purchasing goods for basic needs in moderation, and some are still waiting for the bottom price to be copied. They are holding coins cautiously and observing.
Under the common demand for price system protection and stabilization, multiple individual factories took the lead on Friday and Saturday, actively following up with core old customers to negotiate procurement needs and price intentions for the next two months. After the relevant data is summarized and submitted to the company for review and approval, the customer will be notified to arrange the payment. This combination strategy of "one defense, one attack" reflects the ultimate thinking of individual enterprises on the value and price system at the crossroads. A representative from a single factory in Zhejiang stated that this move is not a rigid "price defense", but aims to create added value by improving service quality and optimizing consumer experience, in order to differentiate and respond to market fluctuations, and thus strive for initiative in the game.