(July 08, 2026) The domestic silicone deep processing market has ushered in multiple favorable resonances. Vinyl silicone oil, as the core basic raw material of liquid silicone rubber, electronic potting adhesives, and new energy thermal management materials, has witnessed phased dividends in market demand, technological breakthroughs, and industrial policies. The import substitution process of high-end electronic grade and medical grade products has significantly accelerated.
According to the latest market data from the Chemical Commodities Platform on July 6, the domestic mainstream general-purpose vinyl silicone oil market quotation has stabilized at 18,500 yuan/ton, with a price increase of 8.82% in the past 30 days. The centralized replenishment of downstream new energy vehicles and photovoltaic packaging companies has driven spot transactions to continue to increase, and the industry's supply and demand pattern has shifted from loose to tight balance. Industry organizations predict that the overall domestic vinyl silicone oil market size will exceed 4.3 billion yuan in 2026, a year-on-year increase of 12.4%, and the annual output is expected to reach 172,000 tons, of which demand in the new energy supporting field will grow by more than 15%, becoming the core engine driving industry growth.
The demand-side explosion stems from the expansion of downstream high-end manufacturing industries. In the field of new energy vehicles, power battery pack sealing gaskets, high-voltage wire harness insulation silicone, and battery thermal conductive gel all use vinyl silicone oil as the core base material. The industry estimates that the consumption of vinyl silicone oil for every 10,000 new energy vehicles is 8-10 tons; with the annual output of domestic new energy vehicles expected to hit 11.5 million units in 2026, the annual increase in vinyl silicone oil supporting power batteries will exceed 13,000 tons. The demand for photovoltaic and high-power LED optoelectronic packaging is rising simultaneously. Highly transparent modified vinyl silicone oil can maintain a light transmittance of more than 85% after 10,000 hours of use. It is an irreplaceable material for photovoltaic inverter potting and LED chip packaging. In addition, the new national standard GB 4806.16-2025 for food contact silicone rubber that will be implemented in September 2026 will force downstream silicone companies to comprehensively switch to low-volatility and low-ring vinyl silicone oils, creating a 10,000-ton new market space.
On the technical side, domestic high-end vinyl silicone oil achieved breakthroughs in key indicators. Recently, the Ministry of Industry and Information Technology announced on July 3 that key materials for fine chemicals will lead the project list. High-purity silicone raw materials are among the key research categories. A number of domestic silicon material companies have jointly researched the core purification process of electronic-grade vinyl silicone oil and overcome the two major technical barriers of low ion residue and low ring body residue. Two silicon material companies in Anhui have reached a strategic cooperation to jointly build a high-purity dedicated production line and use ICP-MS for full-process online detection. The goal is to control the total alkali metal ion content of the product within 0.5ppm and the D4/D5 ring residue below 50ppm. It plans to complete pilot testing by the end of 2026 and achieve mass production of high-end vinyl silicone oil specifically for AI chips and IGBT power device packaging in 2027, breaking the long-term monopoly pattern of overseas brands. At the same time, Zhejiang's leading new material company launched ultra-low volatile vinyl silicone oil with a volatile content of ≤0.2%. The batch viscosity fluctuation is controlled within ±3%, which is suitable for high-end scenarios such as medical implant silicone and infant and child food contact products. The product has passed USP Class VI medical biocompatibility certification and EU food contact compliance testing, and export orders increased by 22% month-on-month.
The supply-side industry structure continues to be optimized, and production capacity is concentrated in leading integrated enterprises. Currently, the top five domestic players, including Xin'an Chemical, Tianci Materials, Dongyue Silicones, and Xingfa Group, together account for 68.3% of the domestic vinyl silicone oil market share, relying on a complete upstream and downstream industrial chain to achieve dual advantages in cost and quality. Many companies are accelerating the layout of green production capacity. The 10,000-ton vinyl silane supporting equipment in Hubei Jianghan New Materials Silicone Industrial Park was put into operation in February this year. It is also equipped with a vinyl silicone oil deep processing production line and uses a closed-circuit cycle synthesis process to significantly reduce production energy consumption and three waste emissions, in line with the requirements of the chemical carbon peak policy. The industry is simultaneously promoting green transformation. According to the "Implementation Plan for Carbon Peaking in the Chemical Industry", silicone companies have comprehensively promoted continuous synthesis equipment, greatly improved the batch stability of vinyl silicone oil, and solved the pain points of uneven product quality of small and medium-sized manufacturers in the past.
Multiple dividends at the policy level continue to be released. The “15th Five-Year Plan” New Materials Industry Development Prospective Research Report clearly lists high-end functional silicones as a key support track, and many new silicone materials have been included in provincial key industrial chains; the new version of the industrial catalog that encourages foreign investment continues to support organic silicon deep processing projects, and supporting land use, energy consumption, and pollution emission indicators are tilted to support high-end technological transformation of enterprises. Although the industry has canceled the export tax rebate for primary polysiloxane in April, which has raised export costs in the short term, companies have accelerated product structure upgrades, reduced exports of low-priced general-purpose materials, and focused on overseas markets for high value-added electronics and medical-grade vinyl silicone oil. Purchase orders for new energy materials in Southeast Asia, Japan and South Korea have steadily increased, and the global competitiveness of domestic silicone oil has continued to improve.
Industry expert analysis pointed out that the current vinyl silicone oil industry has bid farewell to low-end price involution and entered a "high-end, refined, green" transformation cycle. In the short term, photovoltaics and power cells have entered the traditional peak production season in the third quarter, and the demand for vinyl silicone oil will remain at a high level, with prices supported by a moderate upward trend. In the medium and long term, as emerging applications in semiconductors, medical care, and aerospace continue to expand, customized modified vinyl silicone oil will become the core competitive track of enterprises, and leading companies with the ability to integrate high-purity purification and functional modification will continue to seize global market share.
Industry short review
As the core intermediate raw material of the silicone rubber industry chain, vinyl silicone oil is bound to the three high-prosperity tracks of new energy, semiconductors, and medical care downstream, and there is broad room for domestic substitution. The tight balance between short-term supply and demand supports the product market. The triple logic of long-term technological innovation, policy support, and downstream industry expansion resonates. The industry growth is more certain. Low-volatility, low-ion, and functionally modified high-end products will become the core growth of the future market.
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