(July 17, 2026) The National Silicone Industry Information Center released the latest industry monitoring data. In the first half of 2026, the domestic methyl silicone oil market showed steady growth in total volume and structural differentiation. Competition for general-grade products has slowed down. Orders for electronic grade, medical grade, and low-ring high-purity methyl silicone oil have increased sharply. This is coupled with the cancellation of export tax rebates for silicone primary polysiloxane and the EU cVMS starting from April. Affected by the dual policies of control and implementation, the industry officially bid farewell to low-price involution and fully transformed into a high value-added track.
1. Market supply, demand and price: The third quarter fluctuated within a narrow range, and high-end products continued to command a premium.
Monitoring data shows that in early July, the mainstream ex-factory quotation of domestic general-purpose methyl silicone oil (50-1000cSt) was stable at 24,300-24,800 yuan/ton, a slight increase from the average price in the first half of the year, and an increase of more than 40% from the low in 2025. The raw material costs of upstream silicon metal and methyl chloride remain high. The superimposed industry has uniformly implemented phased production reductions and the operating rate has maintained around 60%. Market inventories continue to remain low, and supply and demand have entered a tight balance.
Price differences by category have widened significantly: ordinary industrial-grade methyl silicone oil prices fluctuate gently; electronic-grade low-volatile methyl silicone oil and medical excipient-grade silicone oil have strict metal ion and ring residue indicators, and the premium per ton exceeds 5,000 yuan, and overseas inquiries have increased by 27% month-on-month. The agency predicts that the price of methyl silicone oil will maintain a range of ±5% in the third quarter of 2026, and there is no basis for a sharp rise or fall; in the long term, with the increase in domestic high-purity refining production lines, the cost of general products will steadily decline, but high-end special silicone oil will maintain high premium space for a long time.
From a regional perspective, East China relies on a complete silicone industry chain to occupy 45.5% of the country's market share; Southwest and South China benefit from the new energy vehicles and computing power data center industry clusters, and the demand for methyl silicone oil has grown by more than 14%, becoming the core region for downstream growth.
2. Downstream demand explodes, and three major high-end tracks support growth.
The annual market size of domestic methyl silicone oil is expected to reach 4.52 billion yuan in 2026, a year-on-year increase of 7.1%. The increase is entirely driven by high-end emerging applications. The growth rate of demand for traditional textiles and general release agents has dropped to less than 4%.
I.Computing power liquid cooling New energy vehicle thermal management (maximum incremental track)
Data center liquid cooling and power battery temperature control have become the core incremental markets for methyl silicone oil. Low viscosity and wide temperature range methyl silicone oil is widely used in immersion cooling of energy storage units and AI servers due to its advantages of insulation and low-temperature fluidity. Leading new energy companies have locked in supporting purchases throughout the year. Only the market size of methyl silicone oil intermediates for power battery thermal management has exceeded 300 million yuan, and orders for high-temperature-resistant modified methyl silicone oil have increased by more than 30% year-on-year.
II.Domestic substitution of semiconductors and electronic packaging accelerates
The new version of the national standard GB/T38299-2025 compulsorily tightens the limits of volatile matter and metal impurities. The demand for electronic grade methyl silicone oil (impurities ≤1ppm) has increased by 22.4% year-on-year. As a defoaming and potting aid for power semiconductors, it has gradually replaced imported products. The price difference of foreign brands has narrowed from 15% in previous years to less than 5%.
III.Medical and high-end personal care compliance upgrades
Domestic medical methyl silicone oil has completed the registration of multiple batches of NMPA medical device materials for gastrointestinal defoaming and minimally invasive device lubrication. In overseas markets, the European Union officially implemented D4/D5/D6 ring silicone control in June, requiring ring body residues in methyl silicone oil products to be less than 0.1%. This forced domestic companies to launch continuous molecular distillation refining processes. Export orders for low-ring body high-purity silicone oil surged to avoid the risk of overseas customs seizures.
3. Policy and technology two-wheel drive industrial upgrading
I.Export policy reshapes foreign trade pattern
Starting from April 1, 2026, the 13% export tax rebate for HS39100000 primary polysiloxane will be cancelled, which will directly increase the export cost of general methyl silicone. The industry will actively reduce low-price and high-volume exports and turn to high-value-added deep-processing products such as high-purity modified silicone oil, silicone oil emulsion, and composite additives to go overseas. Customs data from January to June showed that the total export volume of organic silicon increased slightly by 2.3%, and the total export volume surged by 11.7% year-on-year. The optimization of the export structure has shown results.
II.Green refining technology is implemented on a large scale
Leading companies such as Xin'an Chemical and Dongyue Silicon Materials have put into operation a new generation of continuous molecular distillation production lines. The viscosity fluctuation of methyl silicone oil is controlled at ±1.2%, and the viscosity attenuation rate in the wide temperature range of -50°C to 220°C is less than 0.7%. Its performance is comparable to the first-tier international brands. The new acidic resin catalysis process reduces product volatile content to 3.6%, greatly adapting to high-demand scenarios such as liquid cooling and electronic precision manufacturing. The annual demand for low-VOC water-based methyl silicone additives is growing at 7.5%.
III.The industry “anti-involution” continues to clear low-end production capacity
Relying on the 15th Five-Year Plan for New Materials, various regions are accelerating the elimination of old small-scale, high-emission intermittent production lines. The market share of CR5 leading companies in the industry has reached 68%, the localization rate of ultra-high viscosity methyl silicone oil has increased to 52%, and import dependence has continued to decline.
4. Industry Outlook
Industry experts analyze that the core contradictions in the industry in the short term are insufficient high-purity refining capacity and rising overseas compliance thresholds; three major trends in the medium and long term are clear:
I.Production capacity differentiation has intensified, small and medium-sized manufacturers have gradually withdrawn from the general market, and leading companies have focused on electronics, medical, and liquid-cooling special silicone oils;
II.Environmental protection and overseas regulations have forced the entire industry chain to transform low-ring and low-volatility technologies, and solvent-free modified methyl silicone oil has become the mainstream of research and development;
III.Domestic methyl silicone oil has shifted from exporting pure raw materials to an integrated overseas supply model with supporting formulas and customized viscosity solutions, and the added value of the industry continues to increase.
IV.The agency recommends that manufacturers speed up the technical transformation of high-purity production lines, complete EU REACH and food and medicine qualification certification ahead of schedule, focus on the two long-term high-prosperity tracks of AI computing power and energy storage and thermal management, and avoid the risk of price wars for low-end general products.
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