Mingyi Silicone(Anhui) Co., Ltd.
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Against the backdrop of a constantly evolving global economic environment, developments in the silicone industry have drawn widespread attention. Recent adjustments to tariff policies and industry fluctuations have forced many cross-border sellers to confront tough pricing decisions—with increases of up to 30%! This not only poses survival challenges for enterprises but also signals a comprehensive "industry reshuffle." So, what exactly is happening?
On April 14, 2025, according to Global Silicones Network, price volatility for products like DMC (Polydimethylsiloxane) and silicone oils—driven by international market trends—has begun reshaping cross-border e-commerce pricing strategies. Days earlier, the U.S. Customs and Border Protection (CBP) announced revised tariff policies, exempting import duties on numerous technical products. While this injected new momentum into the sluggish silicone market, it also triggered an immediate surge in factory prices.
In the silicone oil sector, major brands have already issued price hike notices for the U.S. market. For example, custom silicone product manufacturers in southern China have raised prices by a staggering 30%. This drastic adjustment will undoubtedly impact both buyers and sellers reliant on these materials. Maintaining sales volumes may now require doubling prices, further fueling inflationary pressures.
The price surge stems from manufacturers adopting production cuts to stabilize margins amid mounting cost pressures. Data shows that the capacity utilization rate for basic-grade silicone monomers has dropped below 65% this year. Tightening supply and intensifying competition have pushed smaller firms to the brink of collapse. Meanwhile, a shortage of high-end production capabilities has increased reliance on imports, with specialty silicone oils and medical-grade silicone rubber now accounting for 72% of total industry imports.
Recent months have seen dramatic price swings for silicone oils and DMC. For instance, DMC market quotations in eastern China fell to ¥13,900–14,300/ton, marking the largest weekly drop since the Lunar New Year. Seasonal demand weakness and global trade friction have further destabilized supply-demand dynamics.
However, as demand in traditional sectors like construction wanes, emerging markets are gaining traction. The photovoltaic (PV) encapsulation materials market is growing at a 42% annual rate, while silicone-based thermal management materials for electric vehicle batteries have surpassed ¥10 billion in scale. These niches offer new opportunities for enterprises navigating the industry shakeup.
Tariff adjustments are compounding pressures on cross-border sellers. U.S. retailers have warned of impending price hikes and product shortages by mid-April. Yale University’s "Budget Lab" predicts tariff-driven price increases of up to 30% for certain goods, highlighting the policy’s ripple effects on businesses and consumers.
With demand recovery lagging and price hikes inevitable, cross-border sellers must act decisively. Strategies like adjusting pricing, diversifying supply chains, and forging collaborative networks will prove critical. While smaller players risk being phased out, adaptable enterprises stand to gain market dominance.
As the industry rebalances, the reshuffle may ultimately steer silicone and DMC markets toward sustainable growth. For now, survival hinges on agility—and the courage to embrace change.
