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Organic Silicone Market Outlook: Rising Cost Support for Raw Silicone Rubber and Compounds, with Structurally Diverging End-User Demand
Organic Silicone Market Outlook: Rising Cost Support for Raw Silicone Rubber and Compounds, with Structurally Diverging End-User Demand
The organic silicone market has entered a recovery and bottom-building phase. In August, the industry’s coordinated production-reduction ratio was adjusted from 60% to 50%, marking an important shift. Monomer producers have maintained stable operations, while DMC and raw silicone rubber spot prices surged amid improved market sentiment, rising to above RMB 13,000/ton and RMB 14,000/ton, respectively. Industry participants believe that tight near-term supply-demand fundamentals are supporting spot prices, while expectations of ample supply in the longer term continue to limit the upside potential.
On the supply side, uncertainty remains over the resumption progress of a monomer plant in Shandong and the arrival schedule of previously placed low-priced orders. As a result, new spot supply is expected to remain limited in the short term. DMC and raw silicone rubber producers continue to show a reluctance to sell spot cargoes, while traders generally maintain low inventory levels and remain cautious about purchasing. Coordinated production cuts will continue throughout August, keeping the overall industry operating rate at around 60%. On the demand side, the market is gradually entering the traditional “Golden September and Silver October” peak season. Production schedules at silicone rubber compound manufacturers and silicone product factories are steadily improving, providing a basis for continued inventory destocking and supporting DMC and raw silicone rubber prices. At present, downstream material manufacturers are mainly replenishing inventory based on immediate needs. Their willingness to purchase aggressively remains limited when prices rebound, although overall spot market activity remains relatively stable.
Raw Silicone Rubber
Demand for raw silicone rubber is currently performing well, with downstream production schedules remaining stable. Production capacity in Shandong, Xinjiang, Hubei, Zhejiang and other regions has gradually reduced operating rates, resulting in a slight decline in supply. Imports have also decreased slightly due to weak demand and limited growth in new orders.
Operating rates across the raw silicone rubber industry remain differentiated. Leading manufacturers continue to have relatively strong order volumes, while smaller and mid-sized producers are experiencing some contraction in orders. As of August 10, mainstream raw silicone rubber prices were quoted at approximately RMB 13,500–14,500/ton. Inventories at major raw silicone rubber manufacturers have largely been transferred, with no significant inventory pressure at present.
Silicone Rubber Compounds
Market support for silicone rubber compounds remains relatively moderate, with prices increasing slightly. The sharp rise in raw silicone rubber prices has significantly strengthened cost expectations. However, demand from downstream silicone product manufacturers remains weak, with buyers maintaining a cautious purchasing strategy and continuing to negotiate prices aggressively.
Overall market supply continues to exceed demand, keeping compound manufacturers’ operating rates at relatively low levels. Limited capacity utilization and intense price competition remain key characteristics of the current market. Industry participants believe that as raw silicone rubber prices continue to rise, the silicone rubber compound market is likely to move steadily upward. Mainstream prices for conventional-hardness silicone rubber compounds have recently increased to approximately RMB 13,500–13,800/ton, with actual transaction prices moving higher accordingly.
End-Use Silicone Products
Global demand for silicone products continues to show steady expansion. In 2025, the global silicone products market reached approximately USD 21.68 billion, representing year-on-year growth of 8.6%. The market is expected to reach USD 31.25 billion by 2030, with a CAGR of approximately 6.3% from 2025 to 2030.
From a regional perspective, Asia-Pacific remains the largest market. In 2025, demand in the region reached approximately USD 9.12 billion, accounting for 42.1% of the global market, with an average annual growth rate of 9.2%. This growth is mainly driven by the upgrading of healthcare infrastructure and the relocation of electronics manufacturing to China, India and Southeast Asia. North America accounted for approximately USD 6.07 billion, or 28.0%, while the EU market reached approximately USD 4.35 billion, accounting for 20.1%.
Overall Market Outlook
Overall, tight near-term supply-demand conditions at monomer plants are providing effective support for DMC and raw silicone rubber prices. However, expectations of increased supply over the medium and long term continue to limit the upside, making a sustained one-way rally unlikely.
DMC and raw silicone rubber prices are expected to continue their gradual upward trend in the near term. Market participants are advised to closely monitor whether downstream peak-season stocking actually materializes following the price increases in early and mid-August, as well as the actual implementation of upstream production cuts. A cautious operating strategy and demand-based purchasing remain advisable.