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Global Silicone Oil Prices Perceive a Downtrend Amidst Higher Inventories
Global Silicone Oil Prices Perceive a Downtrend Amidst Higher Inventories

Global Silicone Oil Prices Perceive a Downtrend Amidst Higher Inventories

  • 14-Feb-2023 2:38 PM
  • Journalist: Nicholas Seifield

Silicone Oil prices have continued their bearish rally across the global market throughout January 2023 due to subdued demand and sufficient inventory level. Additionally, volatile energy prices, low-cost pressure from the feedstock, and rising interest rates over the past few quarters have restrained the market growth of Silicone Oil.

In the Chinese market, Silicone Oil prices have been observed to be on the lower end due to weak cost pressure from the feedstock Silicon metal. The unfavorable weather conditions and the destocking of materials have hampered industrial and production activities. In addition, demand from the downstream cosmetics and automotive has remained stable on the weak side. Furthermore, the overall trading atmosphere was comparatively quiet, and a sufficient inventory was available to cater to domestic demand. Although, a market participant reported that demand from the downstream industries would gradually improve after the Lunar New Year's holidays. The price realizations of Silicone Oil have tumbled by USD 105/MT in January on a FOB basis.

On the other hand, Silicone Oil prices have plunged by USD 85/MT in the German market. Regarding domestic production, operating rates remained under check due to weak consumption from the downstream industries. Feedstock Silicon metal prices have decreased throughout the month, resulting in the Additionally, demand for Silicone Oil from the downstream automotive, cosmetics, and other competitive industries have remained weak due to sluggish consumer sentiments. While the material availability has been ample in the region, further easing the prices of Silicone Oil. Moreover, the supply has been supported by the cheap inflows of Asian imports, which has other reasons for the price drop. However, the looming recession over the European region has eased throughout January 2023.

Similarly, sluggish demand and abundant material availability in the US have weighed down the prices of Silicone Oil in the domestic market. Additionally, a sharp decline in the freight rates resulted in better-imported availability of domestic material. In conclusion, Silicone Oil CFR Houston prices were settled at USD 3920/MT during January 2023.

According to ChemAnlayst, "Global Silicone Oil prices might gain an upward trend in February 2023 due to further expectation of a rise in demand from the end-user automotive industry. Meanwhile, feedstock Silicon metal is expected to increase, which may positively impact the production cost of Silicone Oil."

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