In December 2025, China's domestic silicone industry experienced a significant rebound. The price of its core product, DMC, surpassed 13,500 RMB/ton, up 8% compared to early November, achieving the industry conference's target price increase three weeks ahead of schedule. Products such as 107 silicone, silicone oil, and gum also rose in tandem, with the industry shifting from a 'price war' to a 'value war.' The price increase was driven by simultaneous factors on both the supply and demand sides. On the supply side, 11 domestic silicone monomer manufacturers reached a consensus to cut production by 30%, with actual production cuts in December amounting to about 500,000 tons per year. Coupled with production halts during the dry season in Southwest China and capacity reductions in the North, the operating rate of DMC in East China dropped to 68%, down 12 percentage points from November. Internationally, Dow Chemical announced a price increase of 10%-20% starting December 10, with giants like BASF and Wacker likely to follow, further tightening global supply. On the cost side, the price of industrial silicon in Yunnan rose to 9,800-10,200 RMB/ton. Together with higher prices for methanol and electricity, DMC production costs exceeded 11,500 RMB/ton, turning theoretical profits for companies from negative to positive. Theoretical profits per ton in Q4 are expected to reach 437 RMB, with top companies potentially earning 600-800 RMB per ton in actual profits. Demand also performed strongly, with emerging sectors such as new energy vehicles (NEVs), photovoltaics, and electronics driving growth. Silicone consumption per NEV reached 24-25 kg, more than three times that of traditional fuel vehicles. Global photovoltaic installations are expected to rise 30% year-on-year, boosting demand for photovoltaic sealants. The 5G device upgrade cycle and the spread of AIoT devices are also driving demand for high-end silicone. At the same time, end-user stockpiling at year-end further supports prices. The industry structure is optimizing, with leading enterprises showing clear advantages. Hoshine Silicon, with 1.73 million tons of silicone monomer production capacity and cost advantages from its Xinjiang and Yunnan bases, has become the global leader. Dongyue Silicon is focusing on the high-end market, penetrating the Ningde Times supply chain with electronic adhesives. Companies such as Xin’an Shares and Xingfa Group are strengthening competitiveness through industry chain synergy. As outdated capacity is rapidly cleared, the industry's CR5 concentration rises to 65%, allowing companies with cost and technological advantages to stand out in this value reassessment.