With the ringing of the Chinese New Year bell in the Year of the Snake, the silicone market has also ushered in a new year. Before the holiday, although the market performed steadily, there was already a certain downward trend. After mid January, mid to downstream enterprises stocked up at a low level, market trading gradually slowed down, and individual factories mainly relied on pre-sale orders for delivery.
From the supply side, the increase in individual production capacity will significantly slow down in 2025, and the industry supply pattern will improve. However, due to the incomplete release of the increased production capacity in 2024, there is still an excess of domestic organic silicon production capacity. But upstream enterprises have formed a consensus of "anti internal competition", no longer engaging in bottomless competition, but seeking more stable development strategies.
On the demand side, with the continued easing of real estate policies and strong growth in the photovoltaic industry, the organic silicon market is expected to gain new growth momentum. At the same time, the electronic packaging material market is also showing a steady expansion trend, providing new development opportunities for the organic silicon market.
However, the executive order signed by Trump imposing a 10% tariff on Chinese products imported to the United States has brought new challenges to the silicone market. Although Chinese silicone companies are expected to have a controllable impact on the market in the short term due to their advantages in improving the cost-effectiveness of raw materials and gradually phasing out old overseas production capacity, they still need to closely monitor international trade data and market changes.
Overall, the organic silicon market will still be in a period of industry clearance by 2025, with steady growth in terminal demand, but it will be 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 rely on the joint drive of multiple factors. Market participants should closely monitor upstream and downstream inventory and resumption of work, as well as international trade data and market changes, and flexibly adjust strategies to respond to market changes.