April 2025: Silicone Oil Prices Surge Globally Amid Supply Gaps and Strong Demand
- 01-May-2025 9:30 PM
- Journalist: Thomas Jefferson
Silicone oil prices increased in the key markets鈥擴SA, China, and Germany鈥攄uring April 2025 due to a combination of strong downstream demand, raw material tightness, and increasing logistical issues. The price rise was similar across all the three regions and reflected the world-wide dependency on Silicone oil in key markets like automotive, electronics, and personal care, supported by supply-side dynamics like port clogs, trade restrictions, and environmental policies.
In the US, Silicone oil prices increased because of a recovery in motor vehicle manufacturing, which stimulated automotive industry demand for lubricants and brake fluids. At the same time, ongoing expansion of the electronics market, especially in thermal management applications, further supported consumption. Nonetheless, reduced Asian imports, along with port congestion at big US terminals such as Los Angeles and Savannah as well as shortages of labor, suppressed supply. Coupled with cost burdens, the U.S. imposed 'Liberation Day' tariffs and a 125 percent tax on Chinese imports in April, such as silicones in their raw state, that hugely drove up import prices and further tightened the silicone oil market.
Germany also saw Silicone oil price increase, which was led by higher consumption in the personal care and cosmetics industries. Silicone oil remained a popular ingredient among hair care and skin care products due to its ability to serve as an effective emollient as well as a conditioner. However, domestic supply was impacted by low production capacity as well as raw materials shortages, particularly silicon metal. This was compounded by the inefficiencies in European ports, with severe congestion at ports such as Hamburg-Bremerhaven in Germany in April due to intensive yard utilization, slow feeder and barge operations, and road transport reductions. These bottlenecks coupled with minimal overseas supplier availability contributed to condensed inventories and premium prices.
In China, Silicone oil prices rose in the wake of mounting domestic and export demand, with heavy take-up by personal care and electronic industries. Controls on the environment, however, limited increases in output, while well-considered output controls by producers continued to chip away at supplies on hand. Moreover, in China's jammed ports of Ningbo and Shanghai, tighter inspection procedures on containers bound for the U.S. and extra blank sailings all served to slow freight and transportation cost, fueling further pricing pressure.
Silicone oil markets in these nations are likely to remain under upward price pressures in the future if trade barriers, logistics bottlenecks, and raw material shortages continue. But any easing of port congestion or trade tensions might stabilize Silicone oil prices. Market players are cautioned to monitor international crude oil directions, changing tariff regimes, and domestic manufacturing in China, as a sudden dip in the April manufacturing activity hinted at potential demand headwinds. At the same time, a cautiously optimistic pricing environment persists for silicone oil in the USA, Germany, and China.