For the Quarter Ending December 2024
North America
The silicone oil market in North America experienced a consistent decline in prices throughout Q4 2024, driven by evolving demand and supply dynamics. The quarter began with heightened prices in October, influenced by robust demand from the automotive, electronics, and industrial sectors. Silicone oil's role as a lubricant in the automotive sector remained significant, as increased vehicle production supported its consumption in manufacturing and maintenance. However, supply chain disruptions, including port congestion and transportation delays, coupled with supply chain disruptions caused by Hurricane Helene, added volatility to the market early in the quarter.
In November, the market shifted as increased production capacity, both domestically and globally, led to oversupply, easing price pressures. Seasonal slowdowns in construction and agriculture, coupled with cautious inventory management by downstream industries, further weakened demand. Manufacturing activity showed moderate recovery, but economic uncertainties limited the overall market expansion.
December continued the declining trend, marked by subdued demand across sectors. Inventory adjustments and stable raw material costs allowed producers to lower prices. Despite steady growth in the automotive sector, where silicone oil is essential for improving performance and durability, overall consumption contracted due to seasonality and cautious purchasing behavior.
This declining trend reflects the market's adjustment to supply stabilization and softer demand dynamics. However, in comparison to the previous quarter, there was an incline of 2%.
APAC
Silicone oil prices in the APAC region, particularly China, experienced an overall decline during Q4 2024, influenced by weakening demand and improved supply dynamics. October began with a price surge, driven by strong demand from key industries such as automotive, electronics, and semiconductors. The automotive sector showed significant recovery in production and sales, boosting the consumption of silicone oil in applications like lubrication and sealing. However, supply-side constraints, including plant shutdowns and port congestion, limited availability and contributed to initial market volatility.
In November, prices began to soften as increased production capacity led to an oversupply in the market. Declining input costs for raw materials and energy further supported price reductions. Manufacturing activity saw slower growth, and weaker domestic demand contributed to subdued market conditions despite steady demand from industrial sectors.
By December, the market saw a further decline in prices, primarily due to the pre-holiday slowdown and inventory adjustments across industries. Improved supply chain conditions and heightened competition among producers exerted additional downward pressure. Although the EV sector demonstrated robust growth, economic uncertainties and cautious purchasing behavior moderated overall demand, leading to a consistent quarterly decline. The price change from the previous quarter in 2024 remained unchanged, indicating a consistent pricing trend.
Europe
The European silicone oil market experienced a notable decline in prices throughout Q4 2024, driven by a combination of easing demand, improved supply chain conditions, and macroeconomic factors. October saw a brief surge in silicone oil prices in Germany due to robust demand from the automotive, electronics, and semiconductor sectors. The automotive industry, a key consumer of silicone oil for lubricants and sealants, showed strong recovery, with car production rising significantly. Supply chain disruptions, including port congestion at Hamburg and labor shortages, contributed to initial price instability.
However, by November, increased production capacity and stabilized raw material costs resulted in an oversupply, initiating a downward price trend. Seasonal slowdowns in key sectors like construction, personal care, and automotive further reduced demand. Inventory adjustments by downstream industries compounded the decline in consumption, and improved port operations alleviated prior logistical challenges.
December reinforced the downward trend as subdued economic activity, weak manufacturing performance, and reduced demand from sectors like personal care and automotive drove prices lower. Despite growing hybrid vehicle sales, demand for silicone oil lubricants softened due to shifting automotive technologies and economic uncertainties. The price change of 1% from the previous quarter in 2024 indicated a consistently declining pricing trend.
For the Quarter Ending September 2024
North America
Throughout Q3 2024, the North American region witnessed a significant upward trend in Silicone Oil prices, particularly in the USA, which experienced the most substantial price changes. Various factors influenced these market dynamics. The recovery of the automotive industry, driven by increased demand for high-end vehicles, coupled with growth in the electronics and semiconductor sectors, heightened the need for Silicone Oil. Supply constraints arose from unexpected plant shutdowns and technical issues, while rising costs of raw materials further pushed production expenses up.
The average crude oil price further contributed to rising production costs. Supply constraints emerged due to port congestion. Throughout Q3, port congestion impacted the silicone oil market, with manageable delays in July giving way to worsening conditions in August due to an IT outage and ongoing issues in Asia. By September, an ILA union strike caused significant delays at key U.S. ports, intensifying supply constraints and contributing to rising prices.
In comparison to the previous quarter, there was a slight decline of -1%, reflecting the current market conditions. The quarter ended with Silicone Oil priced at USD 2185/MT in the USA. This consistent increase in pricing indicates a positive pricing environment, driven by robust demand and constrained supply.
APAC
The Q3 2024 pricing trend for silicone oil in the APAC region exhibited conflicting patterns. In the first half of Q3, prices in China rose significantly due to a robust recovery in the automotive sector, particularly in electric vehicle production, which increased demand for silicone oil essential for battery components and various automotive parts. Heightened activity in the construction sector also boosted the need for silicone oil in applications like sealants and adhesives. Additionally, downstream industries replenished inventories after a period of destocking, further contributing to the overall demand. However, port congestion exacerbated by Typhoon Gaemi and an IT outage caused significant transport delays, disrupting supply chains. In the second half of Q3, silicone oil prices in China declined due to a seasonal slowdown in demand across downstream industries, especially in the automotive sector. This decline was further influenced by broader market trends, including significant drops in U.S. crude and Brent crude prices. Improved plant efficiencies led to a market surplus, applying additional downward pressure on prices. Despite a 12% increase in automobile production driven by electric vehicle sales, overall demand for silicone oil remained weak. Port disruptions from Typhoon Bebinca and Tropical Storm Pulasan caused severe congestion, compounding supply chain challenges. Economic weaknesses prompted government stimulus measures, but experts emphasized the need for stronger fiscal actions for a meaningful recovery.
Europe
The price of silicone oil in the European region exhibited varied movements throughout Q3 2024. At the start of the quarter, prices in the Netherlands rose significantly due to a strong rebound in the automotive sector, alongside increased industrial production in construction, electronics, and personal care. Supply constraints, driven by unexpected plant shutdowns and technical issues, further restricted production, contributing to higher prices. Demand from the automotive sector was fueled by surging vehicle production, particularly in electric vehicles. However, a disappointing passenger vehicle selling rate in Western Europe, compounded by ongoing high interest rates and elevated vehicle prices, posed challenges. In the second half of Q3, silicone oil prices in the Netherlands declined due to seasonal drops in demand from various downstream industries, particularly the automotive sector. Economic indicators suggested a slowdown, impacting overall consumption, while stable activity in machinery manufacturing was insufficient to counteract the decline. Improved domestic production led to oversupply as producers stockpiled inventories. Additionally, significant drops in U.S. crude oil prices influenced market sentiment and contributed to a bearish outlook. Overall, the Netherlands experienced the most notable price changes, with the silicone oil market exhibiting a hybrid trend. The price change of 3% from the previous quarter in 2024 indicated a consistently inclining pricing trend.
For the Quarter Ending June 2024
North America
In Q2 2024, the North American Silicone Oil market experienced a pronounced downtrend in pricing, driven by a confluence of factors that exerted downward pressure on market valuations. The quarter was marked by a persistent oversupply situation, particularly from Asian suppliers, coupled with moderating demand from key industries such as lubrication, cosmetics, and electronics. This imbalance was further exacerbated by significant plant shutdowns and disruptions, including the prolonged offline status of major silicone oil production units due to uncompetitive pricing and operational inefficiencies.
In the USA, the pricing landscape for Silicone Oil saw the most dramatic shifts. The overall trend was one of continuous decline, influenced by substantial de-stocking activities and a marked slowdown in procurement schedules. Seasonality also played a role, with the typically lower summer demand contributing to the bearish market sentiment. The correlation between these factors led to a significant price decline of 17% between for end-to-end quarter price comparison.
This quarter-ending price of USD 2100/MT for Silicone Oil (SC-85%) 100 cst CFR Houston underscores the negative pricing environment. The combination of excessive inventory levels, high transport costs, and subdued consumer demand created a challenging market scenario. The consistent downward pressure indicates a negative pricing environment, reflecting an overall bearish sentiment in the market.
APAC
In Q2 2024, the silicone oil market in the APAC region experienced a marked decrease in prices, driven primarily by several significant factors. Overproduction and high inventory levels have significantly pressured prices downward. Geopolitical tensions and logistical challenges, including port congestions and elevated freight costs, have further compounded the situation. As a result, the market has seen a bearish sentiment prevail. South Korea has been particularly impacted, with pronounced price declines. The overall trend in South Korea reflects a sharp decline in silicone oil prices, exacerbated by seasonal factors and a subdued economic environment. Q2’s ending price remained 17% below the Q1 ending price. The price decline was more prominent in the first half of quarter than the second half as few suppliers de-stocked their inventories after adjusting expectations. Moreover, the market faced additional strain from plant disruptions and temporary shutdowns, including key facilities operated by Dow and Wacker Chemie, which heightened supply chain vulnerabilities. Despite some stabilization attempts, the overall sentiment remained negative. The quarter ended with silicone oil prices at USD 1960/MT for 100 cst CFR Busan, reflecting the consistent downward pressure and challenging market conditions. This pricing environment underscores the need for strategic adjustments to manage overcapacity and logistical inefficiencies moving forward.
Europe
In Q2 2024, the Silicone Oil market in the Europe Region has been predominantly bullish, driven by a confluence of factors that have sustained an upward trajectory in prices. The surge in crude oil prices, which reached USD 89/Barrel in April, coupled with rising costs of upstream raw materials like chloromethane, has significantly impacted the production costs of Silicone Oil. Moreover, high electricity costs incurred in February and March continued to ripple through the inventory costs into the current quarter. The demand for Silicone Oil has been robust, particularly in the cosmetics and homecare sectors, buoyed by the onset of summer and the associated increase in discretionary spending. Additionally, elevated freight charges and persistent port congestion have further strained the supply chain, contributing to higher spot prices. Germany has experienced the most significant price fluctuations, underscored by a compelling rise in demand amidst stable supply conditions. The domestic market saw heightened activity due to the approaching travel season, with the cosmetics industry notably intensifying its procurement efforts. However, plant disruptions, such as Wacker Chemie’s Koeln site shutdown for over 14 days due to Rhine region flooding, also played a pivotal role in tightening supply and elevating prices. Seasonal demand trends have accentuated these dynamics, with the early part of the quarter seeing higher price rises than the latter half. Compared to the previous quarter, prices in Germany recorded a 1% rise, reflecting a stable yet assertive pricing environment. The end of the quarter saw a price of USD 3350/MT for Silicone Oil (SC-85%) 100 cst FOB Hamburg. Overall, the Q2 2024 period has been characterized by a positive pricing sentiment, propelled by robust demand, supply chain challenges, and elevated production costs.
For the Quarter Ending March 2024
North America
The North American Silicone Oil market experienced a bullish trend in the first quarter of 2024, despite some headwinds. Consumer demand for silicone oil remained stable, particularly in the electrical and consumer goods sectors. However, rising US mortgage rates and a slowdown in the EV market caused some concern about future consumer spending. Supply also faced challenges due to overstocked inventories and shipping container shortages caused by Red Sea attacks. This, combined with a global rise in feedstock costs, pushed prices up in January.
February saw a further increase in silicone oil prices despite signs of weakening demand, particularly in the industrial lubrication and pharmaceutical sectors. This price rise was primarily driven by supply disruptions caused by the Red Sea situation and a shortage of tankers on the Pacific route. By March, Chinese supplies came online and this helped stabilize supply in the US market. Silicone oil prices continued their upward trend, though at a slower pace, as demand remained moderate. Despite some inflationary pressures, the US Federal Reserve's neutral stance offered some stability to the market.
Overall, the North American Silicone Oil market in Q1 2024 navigated a complex interplay of supply chain disruptions, rising feedstock costs, and fluctuating demand. While initial price increases were strong, the trend slowed down by March as supply filled the gap.
Europe
The Silicone Oil market in Germany exhibited a complex interplay of supply and demand dynamics throughout the first quarter of 2024. Prices initially dipped in January due to high feedstock costs and subdued demand across various sectors like personal care and renewables. However, the situation reversed in February and March, with prices trending upward. Disruptions in the Red Sea, coupled with lower cracker operations, initially limited supply. Additionally, a global rise in ethane to ethylene premiums further pushed up feedstock costs. This, combined with improving demand, exerted downward pressure on prices in January.
Despite the initial price dip, positive indicators emerged in February. Inventories remained low due to supply disruptions, and demand showed signs of improvement, particularly in contact lens and nutritional chemical sectors. Furthermore, Evonik's positive outlook on Silanes (silicone oil derivatives) signaled a potential market upturn.
By March, silicone oil prices continued their upward trajectory, fueled by rising demand from the electrical and electronics industry. Supply also stabilized as production increased to meet export orders and shipping capacity expanded. German suppliers, however, faced challenges attracting Asian customers due to higher contract prices compared to weaker Asian demand. Overall, the Silicone Oil market in Germany navigated a period of price fluctuations in Q1 2024. While initial weakness stemmed from high costs and subdued demand, the quarter concluded with signs of recovery driven by rising demand and stabilizing supply.
Asia Pacific
The Korean Silicone Oil market experienced a period of gradual price increases throughout the first quarter of 2024. This trend emerged despite initial headwinds from high feedstock costs and subdued demand.
January saw modest price growth due to safety stocking and rising business activity. However, concerns about excessive Korean manufacturing capacity limited significant price increases. Lunar New Year celebrations in February further impacted supply, leading to inventory building and keeping prices down. Additionally, strong competition from Asian and European suppliers exerted downward pressure on Korean producer prices. By February, the market shifted as Chinese traders held onto higher stockpiles, reducing domestic supply in Korea. This, coupled with a global rise in feedstock ethylene prices, caused a price uptick in February. The situation continued in March, with Korean silicone oil prices further bolstered by rising demand from the electrical and electronics industry.
While overall demand remained moderate, there were signs of improvement in specific sectors like personal care, semiconductors, and EV markets. Currency fluctuations also played a role, with the Korean Won appreciating slightly against the US Dollar in February, making imports more competitive. However, the Won depreciated in March, potentially impacting future import costs. Overall, the Korean Silicone Oil market in Q1 2024 navigated a complex interplay of supply, demand, and currency factors. While initial weakness persisted, the quarter concluded with a bullish trend driven by tightening supply, rising feedstock costs, and pockets of improving demand.
