# Silicones: Cycles

How Chinese energy curbs sent siloxane to record highs

Source page: https://www.materialinsights.org/chemicals/silicones/cycles/

What this tab covers How its prices and margins move: past booms and busts with price levels, the spread or margin that the industry watches, the drivers of the cycle and the metrics to track.

DMC is a Chinese commodity whose price follows silicon metal, methanol and Chinese capacity discipline. Finished silicones are steadier because they carry formulation and qualification margins. The big swings come from Chinese energy policy: power cuts in 2021 sent silicon and DMC to record highs, then a wave of capacity pushed DMC to near cash cost by 2025. Western producers' results track this through their siloxane-exposed segments. The floor is Chinese cash cost; the ceiling is set by power-driven silicon shortages.
 The spread to watch **DMC minus (0.44 x silicon metal + 0.95 x methanol)**

In June 2025, at about CNY8,500-9,000/t silicon and about CNY2,000-2,500/t methanol (indicative), the feed basket was about CNY5,800-6,300/t against DMC at about CNY10,700/t, leaving about CNY4,500/t for conversion, energy and margin; reports described this as near cost (derived, indicative; SMM).

#### Booms and busts

1. Autumn 2021

China's energy dual-control policy curtailed silicon metal smelters in Yunnan and elsewhere; silicon and DMC prices spiked.

Chinese DMC peaked near CNY60,000/t in September 2021 (indicative, Chinese price reporters)

2. 2022-2025

New Chinese monomer capacity and weak property demand pushed DMC down; silicon metal prices fell about 21% in 2025 to the lowest since 2016 (USGS via silicon tile).

DMC about CNY10,700/t mainstream and CNY10,500/t East China quotes in mid-June 2025, with lows near CNY10,000/t (SMM)

3. Q4 2025 to 2026

Chinese 'anti-involution' discipline and cost support lifted DMC; Dow announced Barry's closure for mid-2026 to cut high-cost upstream capacity.

DMC rose more than 23% in Q4 2025 (SunSirs headline); Dow Performance Materials and Coatings Q4 2025 net sales $1.9 billion, down 6% YoY (ERJ, Feb 2026)

#### What drives the cycle

- **Chinese capacity and output discipline.** China holds most monomer capacity; coordinated cuts move DMC quickly.
- **Silicon metal price and power policy.** Silicon is the largest cost item; Chinese hydropower seasons and energy rules move it.
- **Construction and property.** Sealants are the largest use; China's property slump has weighed on demand.
- **EV, solar and electronics growth.** Fastest-growing high-value uses.

#### Metrics to track

| Metric | Why it matters | Where to track it |
|---|---|---|
| **China DMC price and monomer operating rate** | Global price floor | SMM, SunSirs, Baiinfo |
| **Silicon metal 421 and 553 prices; Guangzhou Futures Exchange industrial silicon futures** | Feed cost | SMM, GFEX |
| **Wacker Silicones and Dow Consumer Solutions results** | Western margin cycle | company reports |

## Other sections

- [Summary](https://www.materialinsights.org/chemicals/silicones/index.md)
- [Overview](https://www.materialinsights.org/chemicals/silicones/overview/index.md)
- [Correlation](https://www.materialinsights.org/chemicals/silicones/correlation/index.md)
- [Production route](https://www.materialinsights.org/chemicals/silicones/routes/index.md)
- [Production](https://www.materialinsights.org/chemicals/silicones/production/index.md)
- [Feedstocks](https://www.materialinsights.org/chemicals/silicones/feedstocks/index.md)
- [Trading](https://www.materialinsights.org/chemicals/silicones/trading/index.md)
- [Movement](https://www.materialinsights.org/chemicals/silicones/movement/index.md)
- [Regulation](https://www.materialinsights.org/chemicals/silicones/regulation/index.md)
- [Characteristics](https://www.materialinsights.org/chemicals/silicones/characteristics/index.md)
- [Emissions](https://www.materialinsights.org/chemicals/silicones/emissions/index.md)
- [Relationships](https://www.materialinsights.org/chemicals/silicones/links/index.md)