U.S. silicone oil prices dropped mildly in August 2025, with domestic production steady, and cheaper imports, no increase in freight rates. Demand from automotive and electronics was firm but cautious. Just like raw materials, inflation and falling crude oil prices, while tariff changes were weighing on aqueous silicone. However, with excess stocks and limited buying momentum, prices are anticipated to remain soft through Q4 behaviorally notwithstanding a disaster.
Key Highlights
Silicone oil domestic production continued flat, and was buoyed by stable feedstock availability, through a decent supply of silicon metal, whose costs also settled down quickly after some mid-year volatility in the market. Large producers like Dow and Momentive, including many other producers, exhibited disciplined scale of output and monolith levels normalized by Q3 area through reduced panicked buying. Import levels from China, Japan, and Germany remained constant; however, Chinese shipments remained more financially viable due to the cheap raw materials and diminished freight costs. Tariff extensions on common brokering partners and countervailing duties added tiers of complication to securing price but appeared to not severely hinder delivery pathways.
Transpacific freight rates dropped considerably, West Coast spot rates dropped by 10% and East Coast rates were down 21%. Lower landed costs to silicone oil imports had been reinforced, mainly due to the overcapacity in the container market, and carriers attempts to hike rate for imports of silicone oil again had not succeeded and had continued to provide downward price pressure.
Demand from core consuming sectors - automotive, electronics, and personal care - remained flat and subdued. The electric vehicle (EV) market continued to support silicone oil applications for thermal management and insulation, even though growth flattened when compared to prior quarters. Traditional automotive manufacturing experienced slight contraction, with further slowing indicated by consumer caution with spending and slower Original Equipment Manufacturer (OEM) production schedules than previously. Buyers were leveraging low logistics costs to keep their options open.
With supplies remaining lengthy, falling freight cost, and demand remaining restrained, silicone oil prices are likely to remain under pressure through Q4. Unless geopolitical strife worsens or raw material costs become more favorable, the market will likely continue to be `buyer-friendly`. While EV growth and electronics demand could provide some selective upside, pipeline sentiment remains weak.
Diving deep into ChemAnalyst’s Quantitative Analysis
Current market scenarios with major issues on focus and its impact on prices in the coming three months.
What Annual Trend of Silicone Oil Shows?
The yearly silicone oil trends show a seasonal decline in August 2025, influenced by normal decline in seasonal demand and stable supply. Prices did show a recovery in September and October due to the global economy continuing to recover along with demand from automotive and electronic sectors – especially electrical vehicles (EVs) and thermal management. This could quickly signal a short-term bullish phase.
What does the current market indicate?
Recent trends in the market are showing a softening of global crude oil prices because of rising supplies from OPEC+ and record U.S. production, combined with tepid demand following the summer months. In August 2025, Brent crude was averaging USD 67/barrel. Current forecasts show crude prices falling further to USD 58 by the fourth quarter of 2025 as inventories grow. While ongoing geopolitical issues are on pace for months to come such as continued Russia-Ukraine airstrikes and inconsistent export flows, the outlook in general for commodity prices is yet to find grounds for bullish posturing. The mixed signals from China's manufacturing environment, combined with a U.S. labor environment that is showing signs of slowing, piques demand uncertainty in the energy markets. The energy market trends are directly impacting silicone oil pricing in the U.S., a product that modestly decreased in price through August. Decreasing crude oil prices relayed significant reductions in production and logistics costs, while weaker freight rates and consistent imports from Japan, China, Germany compounded price pressure. Overall, silicone oil pricing, which is inextricably dependent on crude oil consumption and production, fluctuates in tandem with other commodities as the global economy seeks recalibration.
Freight market at key routes of this region
