With the arrival of the Chinese New Year of the Snake, the organic silicon market has also ushered in a new starting point. Looking back at the pre holiday period, although the market in January was slightly sluggish, downstream enterprises injected a bit of vitality into the market driven by low stocking levels. The individual factories are busy with the delivery of pre-sale orders, and the order volume even reached mid February.
From the supply side, the new production capacity of the organic silicon industry will significantly slow down in 2025, which has improved the supply pattern of the industry to a certain extent. However, despite the addition of approximately 1.4 million tons of production capacity in 2024, it has not been fully released, resulting in a surplus of domestic organic silicon production capacity at present. However, upstream enterprises have begun to reflect on their past competitive methods, gradually forming a consensus of "anti involution" and seeking a healthier and more sustainable development path.
On the demand side, the continued relaxation of real estate policies has brought hope for the recovery of the construction sealant market. Meanwhile, the rapid development of the photovoltaic industry has also provided new growth points for the organic silicon market. In addition, the steady expansion of the electronic packaging materials market has also brought new opportunities to the silicone industry.
However, the tariff executive order signed by Trump undoubtedly brings new challenges to the silicone market. Faced with this challenge, Chinese silicone enterprises need to flexibly adjust their strategies, fully utilize the advantages of improving the cost-effectiveness of raw materials and gradually phasing out old overseas production capacity, and actively respond to market changes.
Looking ahead to the future, although the organic silicon market is still in a period of industry clearance by 2025, the trend of steady growth in terminal demand remains unchanged. It is expected that the market will show a range oscillation under weak supply-demand balance in the first week after the holiday, but the possibility of a good start still exists. Market participants should closely monitor market dynamics such as upstream and downstream inventory, resumption of work, and international trade data in order to flexibly adjust their strategies.