2025-09-28 14:57Summary of Organic Silicon Industry Conference Call Industry Overview - The global organic silicon production capacity is primarily concentrated in China, accounting for 75% of the total capacity of 4.25 million tons as of 2024 [3][10] - Overseas production capacity has been gradually decreasing since 2015, from 1.35 million tons to 1.06 million tons in 2024 [3] - Dow plans to shut down part of its capacity in Europe by 2026, further reducing supply [1][4] Supply and Demand Dynamics - Organic silicon demand is growing rapidly, with an annual apparent consumption growth rate exceeding 10%, driven mainly by the electronics, power new energy, and construction sectors, which together account for about 60% of total demand [1][5] - The electronic sector is the largest consumer market for organic silicon due to its excellent performance characteristics [1][5] - Current organic silicon inventory levels are low, and there is no certainty of new capacity additions in the next two years, which is expected to lead to significant price increases in 2026 [3][12][13] Future Outlook - The global organic silicon supply is expected to shrink by 2026 due to the exit of overseas capacity and limited new domestic capacity, which will support price increases and improve corporate profitability [1][6] - The industry is anticipated to gradually recover from its current low point, with a potential bottom reversal [1][6] Key Applications and Emerging Demand - The main application of organic silicon is in silicone rubber, which is used in various forms such as room temperature adhesives for construction and photovoltaic applications, high-temperature adhesives for electronics, and liquid adhesives for medical and daily products [1][8] - Emerging demand is particularly notable in the electronics and home care sectors, with applications in computing, robotics, and data center cooling systems [9] Export and Import Dynamics - China has transitioned from being an importer to a net exporter of organic silicon, with exports accounting for about 25% of total production, reaching a historical high in 2024 [10] - Major export markets include Southeast Asian countries, with South Korea being the largest export market, accounting for nearly 20% of exports [11] Price Trends and Profitability - The current price of organic silicon is at a historical low, but significant price increases are expected in 2026, similar to the price surge observed from 2016 to 2018 [13] - Companies like Dongyue and Xinan are expected to have high profit elasticity in the upcoming price recovery, with Xinan's profit elasticity estimated at 200 million yuan for a price increase of 1,000 yuan [14] Recommended Companies - Companies to watch include Xinan, Xinfa, Hesheng, and Luxi, which have strong earnings potential and raw material advantages [16]