Silicone Oil prices in Germany experienced a noticeable upward trend, driven by a combination of rising demand from key sectors, supply constraints, and broader economic factors during the month of October 2024. The automotive industry, which is a major consumer of Silicone Oil, saw strong performance in the meantime, further amplifying the demand for the product. At the same time, supply chain issues, production challenges, and higher raw material costs also contributed to the price hikes, making October a turbulent month for the Silicone Oil market.

The automotive sector played a pivotal role in this price increase. Domestic car production in Germany surged by 16-17% in October, as reported by the German Association of the Automobile Manufacturers (VDA). This was a significant rebound, particularly after a period of slower growth in the sector. Increased domestic car production, coupled with a 3-4% rise in passenger car exports in the January-October period, signaled a revival in the automotive industry. As a key lubricant used in various automotive applications, Silicone Oil benefitted from this uptick in demand. Moreover, the continued strength in the sector came amidst signs of recovery, with new orders in the automotive industry increasing by 2.9% in September, further fueling demand for Silicone Oil.

The electronics and semiconductor industries also contributed to the heightened need for Silicone Oil in October. These sectors, which use Silicone Oil in multiple applications, such as in components and manufacturing processes, saw robust growth. The expanding demand for semiconductors, driven by technological advancements and increased digitalization, placed additional pressure on Silicone Oil suppliers.

The situation at key German ports, such as Hamburg, further exacerbated supply issues. Port congestion and labor shortages, due to holidays, delayed the delivery of goods, including Silicone Oil. At the Hamburg CTA and CTB terminals, vessels had to wait up to six days for berths, and yard congestion restricted train arrivals, adding to the logistical challenges faced by suppliers. This contributed to delays and increased shipping costs, further driving up prices for Silicone Oil.

The global oil market also played a role in the price surge. After a period of volatility, oil prices spiked due to concerns about supply disruptions in Libya and geopolitical tensions in the Middle East. Although prices later fell, the underlying instability in global oil markets kept upward pressure on production costs for a wide range of industrial products, including Silicone Oil.

October 2024 marked a challenging period for the Silicone Oil market in Germany, with prices rising due to a combination of strong demand, particularly from the automotive and electronics sectors, and supply-side constraints. Despite these challenges, there were signs that demand from key industries might stabilize, particularly as the automotive sector showed resilience. As industries continue to recover and production challenges persist, price volatility is likely to continue, making it essential for businesses to monitor these developments closely.