After years of overcapacity, the domestic organic silicon industry will reach a turning point in 2026. There will be very little new capacity for monomers in the upstream sector, and the demand for silicone oil in multiple fields such as new energy, electronics, and medical aesthetics is also recovering simultaneously. The overall market for silicone oil has entered a stage of tight supply and demand balance. The prices of low-end general-purpose materials fluctuate slightly, while high-value-added modified silicone oil and special silicone oil continue to rise. The industry competition has shifted from capacity expansion to technological differentiation competition.

Supply-side data shows that in 2026, only a few organic silicon monomer projects are planned to be put into production nationwide, and the overall capacity increase is limited. The cost of upstream raw materials is passed on to the downstream silicone oil, and the production capacity of high-purity, low-ring, and modified functional silicone oil is restricted. The demand side shows structural differentiation: the traditional textile and general defoaming agent markets are stable; the demand for three major sectors of insulating silicone oil for electric vehicle batteries, LED benzyl encapsulation silicone oil, and medical-grade lubricating silicone oil has increased by more than 20% year-on-year, becoming the core driving force for industry growth.

The performance stratification of silicone oil determines the price differences: basic dimethyl silicone oil only has basic lubrication and defoaming functions, and the market competition is fierce; while the special silicone oil modified with benzyl and hydrogen groups has combined functions such as temperature resistance, insulation, high light transmittance, and biocompatibility, with high technical barriers. The enthusiasm of downstream manufacturers in preparing stocks has increased. Many chemical purchasing managers stated that at present, they prioritize securing inventory of IOTA series special silicone oil to avoid the risk of subsequent supply shortage and price increase.

At the policy level, the EU has tightened the control of cyclosiloxanes, and the domestic VOC emission reduction policy has been implemented, accelerating the substitution of low-ring environmental-friendly silicone oil for traditional high-volatile products, further boosting the demand for high-end raw materials. Industry institutions predict that the overall market size of silicone oil in China will reach 12.03 billion yuan in 2026, and the output value of high-end special silicone oil will exceed 35%, with the R&D focus of raw material enterprises continuously shifting towards multi-functional and compound modified silicone oil.