With the arrival of the Chinese New Year of the Snake, the organic silicon market has also ushered in a new year. Before the holiday, although the market performance in January was weak, stable, and bearish, the trading volume of mid to downstream enterprises gradually weakened after stocking up at a low level in mid January. Individual factories mainly rely on pre-sale orders for delivery, and some companies' orders are even scheduled until mid February.
From the supply side, the increase in individual production capacity will significantly slow down in 2025, and the industry supply pattern will improve. However, the approximately 1.4 million tons of new production capacity added in 2024 has not been fully released. Currently, the domestic organic silicon production capacity is about 6.85 million tons, and the annual operating rate of individual units is around 70%. The trend of oversupply is still difficult to reverse in 2025. However, it is worth noting that upstream enterprises have formed a consensus of "anti internal competition", no longer engaging in bottomless loss competition, but seeking a more stable development path.
On the demand side, with the continued easing of real estate policies, the demand for building sealants is expected to moderately recover. At the same time, the photovoltaic industry has also shown strong growth momentum, with the total installed capacity of photovoltaics in China reaching 886.66 million kilowatts by the end of 2024, an increase of 45.2% compared to the end of 2023. In addition, the electronic packaging material market is also showing a steady expansion trend and is expected to continue to grow in the coming years.
However, the executive order signed by Trump imposing a 10% tariff on Chinese products exported to the United States undoubtedly brings new challenges to the export of organic silicon enterprises. However, with the advantages of improved cost-effectiveness of raw materials and gradual withdrawal of old overseas production capacity, Chinese silicone enterprises are expected to have a controllable impact on the market in the short term.
Overall, in 2025, the organic silicon market is still in a period of industry clearance, with steady growth in terminal demand, but it is still difficult to fully absorb the new production capacity of individual enterprises in the previous two years. It is predicted that the market will experience a "range oscillation under weak supply-demand balance" in the first week after the holiday. Although it is expected to have a "good start", price breakthroughs still need to rely on the dual drive of "strong cost support+demand exceeding expectations".