With the arrival of 2025, the "race track competition" in the silicone industry has officially begun. An internal letter from a certain silicone company revealed the forward-looking perspective of senior management, with the general manager warning that extreme cost control and highly similar product lines will intensify market competition, and the "race track competition" may be raging as early as early as early 2025.
The general manager pointed out that despite the weak supply and demand in 2024, the overall supply of the silicone industry will continue to exceed demand in 2025. However, he also pointed out that the supply side is expanding again on the basis of overcapacity, which will further compress the profit margin of the organic silicon industry chain in 2025. In the face of this challenge, he emphasized that top companies with a large market share and relatively abundant cash flow will maintain resilience, demonstrate strong adaptability and competitiveness.
Market monitoring data shows that at the beginning of the new year, prices of several niche organic silicon products have risen, especially the supply of vinyl double head series is tight, and prices have risen. This trend reflects the current market situation of supply shortage and provides opportunities for leading enterprises.
However, despite maintaining relatively low inventory levels, domestic individual factories have not planned long-term shutdowns for maintenance in January 2025, and it is expected that production will increase in that month. This may lead to increased pressure on the supply side in the short term. Before the Spring Festival, individual factories may adopt price reduction strategies to accelerate inventory reduction and attract orders, increasing the risk of DMC price correction.
In addition, changes in the international situation have also brought new challenges to the silicone industry. The updated list of "Chinese military related enterprises" by the US Department of Defense has added new uncertainties to the international business of the listed companies.
In summary, the organic silicon industry is entering a new stage full of challenges and opportunities in 2025. Top enterprises need to keenly capture market dynamics and flexibly adjust their strategies to cope with the constantly changing industry environment.