October 2024 Sees Notable Drop in Global Silicone Rubber Prices Amid Market Correction and Reduced Demand

In the global market, Silicone Rubber prices experienced a notable decrease in October 2024, primarily driven by a temporary correction following a period of sustained price increases. This downward adjustment in the Silicone Rubber price was influenced by reduced purchasing activity across key sectors, as buyers anticipated potential further price adjustments. The cautious stance adopted by end-users and manufacturers, amid uncertainty in market conditions, contributed to the easing of demand pressures, ultimately affecting the overall pricing dynamics of Silicone Rubber.

In the European market, Silicone Rubber prices fell to 10,010 USD/MT DDP-Hamburg during the month. This decline in the Silicone Rubber price aligned with the reduced sourcing costs from key exporters in the Chinese market, where competitive pricing pressure influenced import dynamics. On the industrial side, Wacker Chemie AG reported a sales decline for Q3 2024, recording €1.43 billion in revenue, down 6% from €1.52 billion in Q3 2023. The primary driver of this drop was a significant reduction in volumes from the POLYSILICON division. Additionally, sales fell by 3% compared to Q2 2024 (€1.47 billion), indicating a continued downturn in performance. From an economic perspective, the October PMI remained in recessionary territory, though it showed minor improvements from earlier lows, reflecting a persistently weak outlook for major European economies. This cautious economic climate influenced suppliers, who were reluctant to engage in bulk inventory purchases, anticipating potential market volatility and pricing adjustments. The combination of reduced demand from key sectors, cautious supplier strategies, and a temporary correction in the previously increasing price trend contributed to the observed decrease in Silicone Rubber prices across the European market.

With regards to the US market, the price of the Silicone Rubber in October decreased to 9829 USD/MT FOB-USGC. This decline in the Silicone Rubber prices is primarily attributed to a 1.0% decrease in the price of Silicon Metal, a key feedstock. The US manufacturing sector continued its decline for the fourth consecutive month, characterized by weaker order books and rising inventory levels, suggesting the possibility of production cuts if demand remains sluggish. On the industrial front, Dow reported its fourth consecutive quarter of volume growth in Q3, with revenue rising 1.3% to 10.88 billion USD. Despite an unplanned cracker outage in Texas, Dow’s cost-efficient operations in the Americas allowed it to capitalize on demand growth, though recovery in Europe and China remained limited. The combination of weak demand and lower feedstock prices has largely contributed to the reduction in Silicone Rubber prices.

ChemAnalyst anticipates that Silicone Rubber prices will exhibit an upward trend in the coming sessions. This price increase of Silicone Rubber is linked to anticipated higher feedstock prices, which will affect production costs. Additionally, strong demand from downstream markets is expected to drive overall consumption of the Silicone Rubber, supporting a continued rise in prices and market activity in the near term.