Major Adjustment to Silicone Export Tax Rebate Policy: Jointly Embracing Industry Transformation and Steadily Expanding Global Cooperation – An Important Communication Letter to All Partners

Dear Partners,

On the evening of January 9, 2026, the Ministry of Finance and the State Taxation Administration of China jointly issued an announcement on the adjustment of export tax rebate policies, clarifying that starting from April 1, 2026, the value-added tax export rebate for products such as 3910.0000 primary form polysiloxanes will be canceled. This means that the 13% tax rebate policy that has long supported silicone exports will officially end, and the industry will completely bid farewell to the "tax rebate subsidy era," entering a new stage centered on value competition.

As a company deeply rooted in the silicone foreign trade sector, we have completed policy interpretation and market analysis at the earliest opportunity. This adjustment is both a challenge of short-term cost pressure for the industry and a crucial opportunity to promote industrial integration and upgrading. With the withdrawal of tax rebate benefits, the model relying on low-price competition will be unsustainable. Companies with technological advantages, stable supply chains, and high-quality customer resources will demonstrate competitive resilience, and the industry structure will be optimized in a healthier direction.

From a market impact perspective, the cost of silicone exports will directly increase after the policy takes effect, and raising export prices has become a consensus in the industry. The current silicone market has already shown positive changes: the prices of core products such as DMC, silicone oil, and 107 glue have recently increased by 300 yuan/ton, with mainstream quotations reaching 14,000 yuan/ton, 15,500-16,100 yuan/ton, and 14,500-14,800 yuan/ton respectively. Coupled with the supply pattern where the industry operating rate remains at around 65%, the first quarter of 2026 has become a critical window period for "rush exports" before the policy takes effect. To smoothly cope with cost changes, domestic companies are successively initiating pricing negotiations with overseas customers. The core objective is to achieve reasonable price transmission through transparent cost communication and jointly share the impact of the policy adjustment. Leveraging years of accumulated global channel resources and deep industry expertise, the company has developed a comprehensive response plan to ensure smooth cooperation:

1. Price Negotiation Support: We provide clear cost breakdown analysis reports to assist partners in understanding the logic behind price adjustments.  We also offer flexible policies such as "tiered discounts based on order volume" and "long-term price guarantees" to replace simple price bargaining with a shared understanding of value, minimizing cost pressure.

2. Order Guarantee during the Transition Period: We have opened an expedited channel for orders during the policy transition period, prioritizing production for orders shipped before April 1, 2026.  Currently, pre-orders for core products are scheduled until the end of February, ensuring stable supply and timely delivery.

3. Compliance and Logistics Empowerment: We provide full-process compliance guidance for customs declaration requirements for 3910.0000 primary form polysiloxanes, while simultaneously optimizing international logistics solutions and allocating sufficient time for customs clearance and transportation to avoid policy-related risks.

4. Market Diversification: Leveraging the advantages of the RCEP regional trade agreement, we are helping partners expand into emerging markets such as Southeast Asia and the Middle East, offsetting the impact of policy fluctuations in single markets.  Our cooperation channels in core export destinations such as South Korea, India, and Turkey have already been upgraded.

We sincerely remind all partners:

Please review your existing orders and procurement plans as soon as possible. If you need to complete shipments before April 1, 2026, we recommend confirming your orders and securing your supply before March 15, 2026, so that we can coordinate production capacity and logistics resources. After the policy takes effect, the company will adjust its pricing system based on market cost dynamics. New prices will be communicated 7 working days in advance to ensure you have sufficient planning time.

In this period of industry transformation, trust and collaboration are the cornerstones of mutual success. We firmly believe that this policy adjustment will drive the silicone industry from "scale expansion" to "value enhancement," and our core competitiveness is rooted in a stable supply chain, professional policy response capabilities, and a long-term win-win cooperation philosophy.

If you have any questions regarding order scheduling, price negotiation, or customs compliance, please feel free to contact your dedicated account manager or our policy consultation hotline. We will provide solutions as soon as possible. We look forward to working with you to seize this opportunity, navigate the industry adjustment cycle together, and continuously create value in the new journey of the global silicone market! Thank you again for your trust and support!

Hubei Shengbangfan International Trade Co.,Ltd

January 12, 2026