Several chemical companies are significantly raising the prices of silicone products, which may be passed downstream. "Caviar face cream" has officially announced a price increase.

Ask AI · How much of the price increases for cosmetics is actually driven by raw material costs?

Recently, affected by the situation in the Middle East, several chemical companies have raised prices for their organosilicon product lines.

Organosilicon is a chemical used extremely widely. Increases in the price of upstream products will also flow through the entire industrial chain, and industries including cosmetics are expected to face pricing pressure.

On March 24, German company Wacker Chemical suddenly announced that it would raise prices for its organosilicon products starting April 1. In a statement, the company said the price increase was due to the serious disruption to global supply chains caused by military conflicts in the Middle East, leading to a significant rise in energy, raw material, and logistics costs.

First Finance reporter learned that Wacker’s organosilicon is one of the world’s largest producers of organosilicon products, supplying more than 2,800 highly specialized organosilicon innovative products. These products are widely used in fields such as automobiles, construction, chemicals, cosmetics, medical technologies, energy and electronics, papermaking, and textiles. In 2025, Wacker Chemical’s organosilicon business contributed about half of the group’s revenue.

Wacker Chemical did not disclose the specific magnitude of the latest round of price adjustments. However, it said that the adjustment percentages differ across product categories. The sales team will communicate with customers in the near term to provide specific information about the products and business.

Wacker Chemical is not the first organosilicon manufacturer to adjust prices. Earlier this month, Dow’s Consumer Solutions business unit issued a notice to partners in Greater China, announcing that it would raise product prices starting March 27. The unit’s core business is mainly organosilicon products. The company expects the increase from this round of price adjustments to be between 5% and 15%.

The trend of rising organosilicon prices had already emerged before the outbreak of the Middle East conflict. In November last year, Dow Chemical had already raised prices for multiple key organosilicon products by 10% to 20%. In January this year, Dow Chemical again raised prices by 5% to 10% for its high-performance construction business products.

At the end of January this year, Wacker Chemical also announced price increases of at least 25% for its main organosilicon products starting February 1, to respond to the sharp rise in commodity prices.

Organosilicon products include silicone oil, organosilicon emulsions, organosilicon resins, organosilicon elastomers, sealants, silanes, silane-modified polymers, and fumed silica, among others. Taking silicone oil as an example, this product is used in household and personal care products such as shampoos.

Recently, due to increases in upstream raw material prices, some cosmetics companies have already announced price increases. German cosmetics giant Beiersdorf Group’s high-end skincare brand La Prairie said it will raise the prices of some products in the China market in April this year, with an increase of between 3% and 5%. La Prairie’s product prices range from several thousand RMB to over ten thousand RMB.

Regarding this round of organosilicon price increases, a senior R&D professional in the chemical industry told a First Finance reporter that since the beginning of this year, the prices of organosilicon have risen due to factors such as exchange rates, and that the worsening Middle East situation has further escalated the rise in costs. He also said cosmetics may take the opportunity to raise prices as well, although the proportion of raw material formulation costs in total product costs is relatively small.

“Although raw material price increases will definitely affect cosmetics costs to a certain extent—such as the costs of emulsifiers and oil-based components in cream/paste-type products being impacted—what you need to know is that formulation costs for cosmetics sometimes are even lower than packaging costs, so the impact from raw materials won’t be very large. It’s marketing and other expenses that really account for the biggest share,” the industry expert said.

He believes that for cleaning-type daily-use products such as detergents, the impact of raw material costs is even greater. “The main raw materials of the surfactants on the surface of these cleaning-type products are mainly petroleum, and rising petroleum prices will definitely lead to higher costs.”

(This article is from First Finance)