On June 6, 2026, the comprehensive restriction node of the EU REACH Regulation (EU) 2024/1328 will officially come into effect. The new regulation states that the concentration of D4 (octamethylcyclotetrasiloxane), D5 (decamethylcyclopentasiloxane), and D6 (dodecamethylcyclohexasiloxane) in any substance or mixture placed on the EU market must not exceed 0.1% (1000mg/kg), covering various export categories including cosmetics, electronic potting compounds, textile treatments, and industrial release agents. D4 has been classified as a persistent, bioaccumulative, and toxic (PBT) substance, while D5 and D6 have been included in the controlled list due to their degradability or because they contain D4. This is the most comprehensive and stringent round of regulation on cyclic siloxanes implemented by the EU since the restrictions in the cosmetics sector in 2020.

For Chinese silicone export enterprises, this regulation means that "compliance" has shifted from an optional consideration to a mandatory requirement. From January to October 2025, the domestic silicone export volume reached 820,000 tons, a year-on-year increase of 18.3%, with exports to the European market growing by over 30%. Meanwhile, Dow's approximately 150,000 tons of silicone monomer capacity in the UK is planned to be shut down by the end of 2026. The contraction of overseas supply combined with elevated environmental thresholds is reshaping the global silicone trade landscape.

Products Meet EU Restriction Standards, Hoshine Silicon's Compliance Capability Supports Exports

Against this backdrop, Chinese enterprises with foresight and compliance capabilities are expected to continue expanding their market share in related fields. As a global leader in both industrial silicon and silicone, Hoshine Silicon is at the forefront of the industry in compliance preparation. Public information shows that Hoshine Silicon has established a mature systematic capability in controlling product impurity residues through process control and volatilization technology during the silicone production process. It is understood that the industrial-grade silicone and deep-processed silicone products produced by the company all meet the requirements of D4, D5, D6 <0.1%, including products such as 107 glue, dimethyl silicone oil, end-hydrogen silicone oil, end-vinyl silicone oil, and low cyclic emulsions (used in cosmetics, textiles, etc., with major grades including HSEM-1001, HSEM-1002, HSEM-1021), which have met the compliance requirements of the EU REACH Regulation, enabling Hoshine Silicon to build differentiated competitive advantages for market access in the EU.

Hoshine Silicon's forward-looking layout in compliance capabilities aligns closely with its strategic direction of focusing on high-end silicone technology and product fields in recent years. According to the company's annual report, Hoshine Silicon is accelerating the market promotion of high-end products such as amino silicone oil and silicone emulsions, while also expanding applications in emerging fields such as 0-degree human silicone and liquid silicone rubber for medical purposes. By 2025, amino silicone oil and silicone emulsions are expected to achieve industrialization, with product quality reaching internationally leading levels, capable of meeting the application needs of industries such as textiles and cosmetics.

Global Leading Position Solidified, Performance Elasticity Awaiting Release

From an industry perspective, Hoshine Silicon maintains its position as the global leader with an annual silicone monomer capacity of 1.73 million tons, with a global market share of over 20% for DMC. The prosperity of the silicone industry continues to recover, with the price of silicone DMC rising from approximately 11,300 yuan/ton at the end of October 2025 to a range of 14,300 to 15,100 yuan/ton in early June 2026 In the first quarter of 2026, the company's comprehensive gross profit margin rebounded to 19.08%, an increase of 4.46 percentage points year-on-year, approaching the gross profit margin levels for the full years of 2023 and 2024 (20.15% and 20.54%, respectively). There will be no new organic silicon production capacity released in the full year of 2025 and in 2026, with the supply side in a relatively tight state.

Against the backdrop of increasingly high green trade barriers, organic silicon export enterprises are facing dual challenges of product and compliance. For Hoshine Silicon, the implementation of the EU REACH new regulations means that compliance capability is no longer a cost item but a hard threshold for market access. At the point when the EU D4/D5 restriction order is officially implemented, this largest organic silicon supplier in the world is leveraging its compliance first-mover advantage and high-end product reserves to transform access barriers into growth momentum