Demand: Growth Driven by New Economic Sectors

With the advancement of technology and the adjustment of the economic structure, silicone is being increasingly applied in new economic sectors such as battery sealing and thermal management of new energy vehicles, packaging and bonding of photovoltaic modules, and insulation protection of consumer electronics components, leading to a steady upward trend in demand. In 2024, the apparent consumption of silicone intermediates in China reached 1.816 million tons, a year-on-year increase of 20.9%. From 2019 to 2024, the compound annual growth rate of the apparent consumption of silicone in China was 11.3%.

Supply: The Expansion Cycle Approaching the End, and the Landscape Expected to Improve

From 2019 to 2024, the production capacity of silicone intermediates in China rapidly expanded from 1.515 million tons to 3.44 million tons, with an average annual compound growth rate of 17.8%. In 2024, the newly added production capacity was 720,000 tons, resulting in relatively high supply pressure. However, this round of production capacity expansion cycle is nearing its end, and the newly added production capacity in the coming years will be limited. As the growth in demand gradually absorbs the existing production capacity, the supply-demand relationship in the industry will gradually improve.

Import and Export: Emerging Markets as an Important Driving Force for Exports

In 2024, the export volume of polysiloxane in primary form was 546,000 tons, a significant year-on-year increase of 34.2%. In terms of the export structure, the total export volume of polysiloxane to emerging markets was 218,000 tons, a year-on-year increase of 30.9%, accounting for 39.9% of the total export volume in China. In emerging economies, the per capita consumption of silicone is low, but the population base is large. With the economic development, it will further promote the export of silicone from China.