In March 2025, prices for dimethylcyclosiloxane (DMC) declined in both Germany and the U.S., driven by a combination of falling upstream costs, an abundant supply, and market caution in key end-use markets.

In Germany, DMC prices have declined as economic factors and soft industrial activity have affected buying habits. Although demand from the automotive and construction sectors is relatively stable, a comparative downturn in industrial activity has made market participants cautious. Oversupply continues to be an ongoing problem, with steady domestic production and appropriate imports creating sufficient availability of DMC. There were no significant disruptions or maintenance shutdowns reported, and producers continued to work below normal capacity.

Feedstock costs – silica or raw materials containing silicon – declined across the region, decreasing production costs and motivating sellers to lower prices. Export margins remained acceptable, and inventory levels were reasonable, with no significant upward cost pressure, compelling domestic suppliers to lower their offers.

Demand indicators were varied. In construction, the order backlog moderately rose, with affected firms experiencing a decline from 55% in February to 54% in March. Nonetheless, the overall demand has not improved to the point that firms are ready to supply methodically. In addition, demand in the automotive industry softened, and data reported a 3.9% drop year on year in German passenger car sales, with gasoline vehicle sales falling even more heavily at 29.4%. A modest interest in hybrids and electric vehicles provided an offset for DMC's consumption in automotive coatings and components.

In the United States, DMC prices also witnessed a decline due to lower production costs, elevated inventory levels, and competition from imports. Throughout the month of March, the domestic supply of DMC remained strong due to steady manufacturing and steady import volume. Earlier inventory builds from previous months have contributed to an oversupplied situation, along with lower feedstock prices that reduced domestic production costs.

There was stable demand in the key areas of automotive, construction, and personal care. However, sellers continued to battle with price pressure from the market. The construction sector showed signs of softening, with domestic spending falling by 0.2% as a result of rising mortgage rates impacting homebuilding and ultimately putting limits on the demand for DMC-based sealants and adhesives. The automotive sector offered some support as sales were up by 9.1% when compared to the previous year, with much of the buying attributed to pre-tariff buying. This helped support demand for DMC in vehicle coatings and parts.

However, the overall market environment remained hesitant, and the imbalance of supply vs. demand contributed to weak pricing momentum as well. Across both markets, the abundant supply and reduced input prices, as well as soft demand, were among the reasons for an overall decline in DMC pricing throughout March.

As per ChemAnalyst, in the future, the DMC market may continue to experience downward pressure as long as supply-demand imbalances persist. High inventories and limited signs of firming feedstock costs may keep sellers from regaining pricing power soon.