Commodity prices have risen dramatically

Commodity prices have risen dramatically

The shortage of raw materials for silicone metal has far-reaching consequences for the price development of silicone sealants. With up to 500% price increases for the raw material, price increases for silicones and MS polymers are inevitable.

The enormous demand and the simultaneous shortage of raw materials for silicon have dramatic consequences for the price development of silicone sealants. With up to 500% price increase for the raw material, we are unfortunately forced to raise the prices for silicones and MS polymers.

Silicon is the new gold

Silicon is a raw material in demand worldwide and is urgently needed for very many products and production processes. The enormous demand, as well as the significantly lower production volume of the valuable raw material, is leading to a current exceptional situation, which has resulted in raw material prices exploding over the past year. Above all, the Chinese government's regulation to meet CO2 emission targets, which previously accounted for the lion's share of silicon production, is contributing to the fact that many mines are closed or are producing significantly less raw material than was the case two years ago. For example, the price of silica metal, an essential ingredient for the production of silicones, has risen by up to 500% in the past year. Unfortunately, we are therefore forced to raise the prices for our silicone sealants from DL-chemicals. It was only a question of time that the manufacturer would react to this price increase in the procurement of the basic raw material for the production of silicone oil and silicone polymers by raising the sales prices for the silicones. Unfortunately, due to the low calculated prices, it is not possible for us to absorb the higher purchase prices, so that we are forced to raise the prices in the online shop as well.

As soon as the shortage of available raw materials has reached a tolerable level and, as a result, raw material prices have also reduced to an acceptable level again, we will do everything we can to reduce the prices for the end product again as well, because we want to offer products not only in the best possible quality, but also at affordable prices.

However, not only the Parasilico brand silicones are affected by these price increases, but also the Parabond 600 assembly adhesives, which we also stock in four colours in our online shop.

Besides the higher procurement costs, the borderline market situation for raw materials has also had an impact on delivery times. For standard products - i.e. silicones in standard colours - 5 weeks and more are now not uncommon. Due to extensive stock-keeping, we are, however, able to compensate for the long delivery times with a high stock level, so that we order new goods when we have a larger remaining stock than was previously the case, in order to continue to guarantee the availability of silicones in our online shop without interruption.

Alkoxy silicones (for the time being) not affected

Even though the silicones of our own brand S-Polybond Silikonprofi are based on the same basic raw materials, these silicones have not been affected by the price increases so far. However, we cannot rule out the possibility of increases in manufacturing costs in the coming weeks and months. For the current stock, however, the old conditions apply, so that we will continue to offer our own brand at the favourable prices until the additional costs can no longer be absorbed by the tightly calculated profit margin.

Incidentally, these price increases do not only affect the silicones in our shop. All manufacturers of sealants based on silica metals are struggling with this problem, so that the prices for silicones will be affected by price increases everywhere in the future. How strong the price increases will be at the respective manufacturers and dealers always depends on their price calculation. How long it will take for prices to return to what we consider an acceptable level also affects the entire market and cannot be answered at this time.

Picture left: Our alkoxy siliconeSILIKONprofiin RAL 7016 Anthracite grey
Picture right: Our alkoxy siliconeSILIKONprofi in RAL 8016 Mahogany brown

Further price increases not excluded

Silicon is not the only raw material that is currently in short supply. Many other raw materials, including many metals, have become significantly more expensive recently. We fear that the increase in prices for silicone sealants is only the beginning, and many other products could be affected by price increases. While we have been able to compensate for the price increases with some suppliers through higher purchase quantities and renegotiation of purchasing conditions, various manufacturers have already announced price increases for the next quarter, so that we are trying to keep the sales prices stable and cost-effective until the market has stabilised to some extent with a very extensive inventory expansion at old prices. We hope that our strategy will work and that we can refrain from further price increases in our shop.

As soon as further products are affected by price increases, or prices have fallen again, we will of course cover this in another blog post.

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Category Wissenswertes