Preface
As of mid-2026, the silicone industry has undergone numerous changes. Fluctuations in raw material prices, the implementation of policy adjustments, and the rapid emergence of new technologies - each of these changes is impacting every enterprise along the supply chain. As a silicone product manufacturing factory, we have been keeping an eye on industry trends. Today, we will help you sort out several key terms in the silicone industry for the first half of 2026. We hope this can provide you with some references.
Key word one: Price increase
The most obvious feeling in the first half of the year was the increase in prices.
Since 2026, the organic silicon market has implemented strict production reduction policies. From June to August, the entire industry reduced production by 40%, and the operating rate dropped to below 60%. Coupled with the shutdown of some production capacity by overseas giants such as Dow and Wacker, the market supply has significantly tightened.
The supply side has tightened, leading to a natural increase in prices. The price of DMC has risen from 11,000 yuan per ton at the end of 2025 to 14,500 - 15,000 yuan per ton. By the end of June, the price of 107 rubber had been set at 14,800 - 15,000 yuan per ton, and the mainstream price of raw rubber had been set at 15,500 - 15,800 yuan per ton.
Behind the price increase lies the industry's proactive adjustment from "competing on prices" to "controlling production capacity". For downstream product manufacturers, the rise in raw material costs forces us to improve both quality and efficiency.
Key point two: Tax refund cancellation
Starting from April 2026, a policy change triggered a chain reaction within the industry - the export tax rebate for the primary form of polysiloxane was officially abolished.
Take 107 glue as an example. Based on the market price of approximately 14,200 yuan per ton at that time, after the 13% tax rebate was cancelled, the export cost per ton directly increased by about 1,600 yuan.
In the past, many enterprises relied on tax rebates to maintain their profits from the export of low-end raw materials. Once the tax rebates were abolished, the path of low-end exports became impossible. This forced the industry to transform towards higher value-added directions - producing high-end products and conducting sophisticated processing, rather than simply selling raw materials.
For factories specializing in silicone products, this change actually serves as a signal: the space for low-end competition is shrinking, while the value of quality and service is increasing.
Key Word Three: New Energy
If we were to determine which sector saw the fastest growth in demand for silicone in the first half of the year, the answer would be the new energy sector.
According to a survey by Baichuan Yingfu, in the first quarter of 2026, the consumption of organic silicon related to new energy accounted for more than 28% of the total demand, an increase of nearly 9 percentage points compared to 2024.
In the field of electric vehicles, the usage of organic silicon has significantly increased. Taking the mainstream lithium iron phosphate and ternary battery packs as an example, flame-retardant room-temperature curing liquid silicone rubber (LSR) is widely used in multiple aspects such as battery module sealing, cell encapsulation, and cooling pipeline bonding. For some high-end models, the amount of silicone used per vehicle has reached 1.8-2.5 kilograms.
The rapid development of new energy vehicles is opening up a new growth space for the silicone rubber industry.
Key term 4: Liquid Silicone Rubber (LSR)
Liquid silicone rubber is not a new thing, but in the first half of 2026, it became extremely popular.
The global liquid silicone rubber market is projected to grow from $15.2 billion in 2025 to $27.2 billion in 2034. Domestically, the leading organic silicon company, Hengsheng Silicon Industry, announced in June 2026 that its 0-degree human silicone rubber and medical-grade liquid silicone rubber have completed pilot testing and are about to enter the commercialization promotion stage. This product features ultra-low hardness, high resilience, and biocompatibility, and can be widely applied in human model imitation, medical gaskets, wearable devices, and high-end consumer electronics, etc.
The liquid silicone rubber molding technology is evolving towards higher precision, automation and environmental friendliness. For the silicone product industry, the widespread use of LSR means that products can be made more precise, more complex and with more stable quality.
Key Point Five: High-endization
The term "high-end" has been talked about for many years, but in the first half of 2026, it is actually turning into concrete actions.
On the one hand, the export structure is upgrading. The proportion of high-margin products such as functional silanes, electronic-grade silicone oil, and medical-grade silicone gel in exports has increased from 18% in 2024 to 27% by the beginning of 2026.
On the other hand, the export of low-end products is contracting. In the first week of April 2026, the export volume of primary silicon products decreased by 18.3% compared to the previous year; while the export volume of liquid silicone rubber (LSR) increased by 22% during the same period, mainly to Europe, America and Southeast Asia, and was used in automotive parts, medical devices and precision electronic products.
Between the decline and the rise, the trend is quite clear - it has become increasingly difficult to achieve high-volume sales at the lower end, while there is a way out at the higher end.
The entire industry is accelerating its evolution towards the "high-performance, customized, and green" directions. Leading companies are continuously increasing their research and development investment, gradually breaking the long-standing monopoly of overseas brands in the high-end market.
Key Point 6: Customization
In the first quarter of 2026, the domestic market size of customized silicone rubber products increased by 18.7%. Among them, the growth rates of the food-grade silicone rubber and high-temperature-resistant silicone rubber segments reached 22.3% and 26.8% respectively, significantly higher than the overall industry growth rate.
Customers are no longer satisfied with "buy whatever is available", but rather they hope to "do whatever is needed". The rapid growth of customized demands has placed higher demands on the R&D capabilities, production flexibility and delivery efficiency of factories.
This is both a challenge and an opportunity for a factory like ours that specializes in custom-made silicone products.
Key Word Seven: Greenification
Environmental protection and sustainability are shifting from being "plus points" to "mandatory requirements".
Shin-Etsu Chemical has developed recyclable thermoplastic silicone rubber, which possesses high strength, transparency and soft texture. Domestic enterprises are also accelerating their efforts to develop environmentally friendly silicone rubber materials - such as halogen-free flame-retardant silicone rubber and low-odor silicone self-adhesive tapes - and new products are constantly emerging.
On the policy front, the "carbon neutrality" goal is being continuously advanced, which has placed higher demands on the production process and environmental performance of silicone materials. Greening is no longer just a slogan; it has become a real market entry criterion.
What do these keywords mean to us?
Having sorted out these seven key points, you might ask: What do these changes have to do with a silicone product factory?
The relationship is very important.
The price hikes and the cancellation of tax rebates mean that costs are increasing. The strategy of simply competing on prices is no longer feasible.
New energy and liquid silicone gel indicate that new market opportunities are emerging. Whoever makes the early preparations will be able to gain the upper hand.
High-end and customized products mean that customers have increasingly higher demands for quality and service. The extensive production model is no longer sustainable.
Greenification means that environmental compliance is not an optional choice but a mandatory requirement.
What is Hongxiangda doing?
Facing these changes, Hongxiangda did not halt.
We are continuously improving the overall process capabilities including rubber compounding, molding, laser engraving, spraying, and grinding, to ensure the consistent quality of each batch of products. We are also keeping an eye on the development of new technologies such as liquid silicone rubber, in preparation for future product upgrades.
More importantly, we have always adhered to customized services - regardless of whether your order is large or small, and regardless of whether your product is simple or complex, we treat them all with the same standards.
The industry is changing, but our commitment to quality remains the same.
Conclusion
In the first half of 2026, the key words in the silicone industry can be summarized as: price increase, cancellation of tax rebates, new energy, liquid silicone, high-endization, customization, and greenification.
Behind these keywords lies the transformation of the industry from "competing on prices" to "competing on quality", and from "explosive growth" to "high-quality development".
As a factory that has been deeply engaged in silicone products for 15 years, Hongxiangda will continue to keep up with the industry trends and provide better products and services to respond to every change in the market.