(Yicai) March 25 -- Global chemical firms are raising the prices of their silicone products amid escalating tensions in the Middle East. Given silicone’s broad industrial applications, the increases are expected to have a ripple effect across many industries, including cosmetics.

Wacker Chemie will hike prices of its silicone products starting April 1, the German chemical company said yesterday. The conflict in the Middle East has severely disrupted global supply chains leading to a big jump in energy, raw materials and logistics costs, it said. The Munich-based firm did not disclose specific details of the price increases.

As one of the world’s leading silicone manufacturers, Wacker Chemie supplies more than 2,800 kinds of highly specialized silicone products. These products are widely used in sectors such as automotive, construction, chemicals, cosmetics, medical technology, energy, electronics, paper, and textiles.

Wacker Chemie is not the first silicone manufacturer to adjust its prices. Earlier this month, the US’ Dow Chemical notified its partners in China that it will raise its silicone prices from March 27, with expected increases ranging from 5 percent to 15 percent.

The price of silicone has been rising this year due to exchange rate factors, and tensions in the Middle East are exacerbating these cost pressures, a senior research and development professional in the chemical industry told Yicai. Cosmetics firms may use this as an opportunity to push up their prices, although raw material costs typically represent a relatively small portion of total product costs.

La Prairie, which is a premium skincare brand under German cosmetics giant Beiersdorf, has already announced plans to hike the prices of some of its products in China next month, with adjustments ranging from 3 percent to 5 percent. The brand’s products are generally priced from several thousands of Chinese yuan (equivalent to hundreds of US dollars) to tens of thousands of yuan.

Although the increase in raw material prices will have some impact on the cost of cosmetics, particularly due to the higher costs of emulsifiers and oil-based ingredients, the formula cost of cosmetics can sometimes be lower than the packaging cost, limiting the overall effect, the R&D expert said.

For cleaning products such as detergents, the impact is more pronounced. “The primary raw materials for these products are surfactants, which are largely derived from petroleum. As oil prices rise, costs will definitely increase,” the person said.

Editor: Kim Taylor