Improved costs, lower raw material prices support Elkem silicones earnings growth

Oslo – Elkem Silicones has reported strong growth within its silicones business, which is currently under strategic review to be completed before year-end.

The business, which accounts for 46% of group revenue, reported marginal sales growth to NOK3.8 billion (€327 million) for the second quarter, up from NOK3.7 billion in the same period the year before.

The increase in revenue was explained by higher sales volumes, partly offset by lower commodity sales prices.

Earnings (EBITDA), however, grew substantially from NOK45 million in the second quarter of 2024 to NOK247 million in 2025, Elkem reported 11 July.

The Norwegian group linked the improvement in earnings mainly to “improved cost positions, operational excellence, and lower raw material costs.”

Sales volumes were up 22% compared to the second quarter of 2024, mainly due to higher demand in the Asia-Pacific region.

Year-to-date, the division reported total sales of NOK7.7 billion, up 9% year-on-year.

Earnings for the first half grew significantly to NOK448 million, up from a loss of NOK57 million reported in the first six months of 2024.

Commenting on the market environment, Elkem said the decline in raw material costs was pushing prices to “new lows.”

“Market sentiment remains subdued due to overcapacity in China and reduced demand from the construction, textiles, and chemical sectors,” Elkem added.

According to Elkem, DMC reference prices for silicones in China were down to CNY10,400 per tonne by the end of the second quarter, compared to highs of over CNY35,000 in 2022.

The price decline, Elkem said, is driven by "lower raw material costs and price dumping to reduce high inventory levels."

Furthermore, the group noted that demand for commodity silicones in the EU and the US was negatively impacted by changing tariff policies.

Overall, it said, there was “solid demand” for speciality grades.

For the next quarter, Elkem expects markets to remain “stable at low levels” but noted that current price levels were not deemed sustainable in the long term.