Shin-Etsu Chemical Announces Price Increase for Silicone Products Amid Rising Costs

The price of the Silicone Rubber in the global market witnessed a notable surge this month. This surge in the Silicone Rubber price is majorly attributed to the increase in the price from the major manufacturers in the Asian market particularly China and Japan. In contrast, the price of the Silicon Metal remains on a higher level but marked marginal decrement in June which has counter acted to the Silicone Rubber price this month. The supplier’s activeness in the inventories management along with the surplus in the global demand and the supply chain has majorly influenced the price of the Silicone Rubber in the global market.

Shin-Etsu Chemical Co., Ltd. has announced a forthcoming revision of its silicone product prices, both in Japan and internationally which has majorly impacted the Silicone Rubber market globally. This decision comes in response to a variety of escalating costs impacting the production and distribution of these materials. In recent years, Shin-Etsu Chemical has faced significant increases in the prices of raw materials and energy required for manufacturing. Additionally, the costs associated with plant construction and equipment repairs have surged, driven by rising labor and material prices. Logistics expenses and the costs of auxiliary materials, such as product containers, have also been climbing steadily and are anticipated to remain high in the foreseeable future. Despite ongoing efforts by Shin-Etsu Chemical to mitigate these cost pressures through internal efficiency improvements, the company has concluded that these measures alone are insufficient to offset the increased expenditures. As a result, a price adjustment for Silicone Rubber has become necessary.

Silicone Rubber prices in the USA have surged this month, even though the price of Silicon metal in the feedstock market saw a slight decrease. This increase is due to various factors, including supply chain dynamics and activities in downstream markets. In the automobile sector, total sales in June were 1,341,273 units, representing a 7.15% decrease from the previous month and a 3.22% decline from the previous year. Conversely, Boeing's strong performance in the aerospace sector has boosted demand for high-performance materials like Silicone Rubber. By May 2024, Boeing had delivered 157 commercial airplanes and secured 611 net orders, with an additional 43 aircraft deliveries expected in June. Additionally, the construction industry experienced solid growth in June, with increased spending on both single and multifamily housing projects and the addition of 27,000 jobs, indicating robust market conditions. These diverse market dynamics, spanning the automotive, aerospace, and construction sectors, have collectively contributed to the surge in Silicone Rubber prices in the USA.

In the Chinese market, the price of Silicone Rubber surged this month, despite a 0.5% decrease in the price of Silicon Metal in the feedstock market. The downstream automobile sector experienced a downturn, with retail sales of new sedans, crossovers, SUVs, and multipurpose vehicles declining by 8% in June to below 1.76 million units, according to the China Automobile Dealers Association. Additionally, the HS China, an Aerospace & Defence index displayed minimal activity, indicating subdued demand conditions in the aerospace sector.

According to ChemAnalyst, Silicone Rubber prices are expected to follow bullish price trend in the forthcoming weeks. This anticipated in the Silicone Rubber price surge is linked to positive performance expectations in major economies, which will significantly influence global demand for Silicone Rubber. Additionally, price increases from major manufacturers are expected to play a pivotal role in the fluctuations of Silicone Rubber pricing.