Despite Tepid Demand, Calcium Hydroxide Prices Remain Resilient in the German Market
- 09-Feb-2023 4:50 PM
- Journalist: Jacob Kutchner
Frankfurt, Germany: In most European countries, the high energy costs have compounded the challenges of producing various bulk chemicals, including Calcium Hydroxide. Despite a reduction in the TTF natural gas prices, the profit margins of the manufacturing firms have remained under pressure amid high-cost inventories in the regional market of Calcium Hydroxide. As per the market participants, even though supply chain issues have been diminished, rising inflation and market uncertainties have caused a slowdown in Europe's largest economy.
The European construction sector has become bleaker as the economic fallout from a war in Ukraine severely impacted the major input materials supply chain. The limited gas supplies have resulted in a price increment in the manufacturing costs of Calcium Hydroxide. The ChemAnalyst database has shown that the price trends of Calcium Hydroxide have demonstrated an increment of approximately 6% in the German market. The manufacturers have opted to cut Calcium Hydroxide production as they were unable to pass on the price hike to the terminal consumers. On the demand side, construction activities have been contracted in the European region, which has led to limited procurement of upstream raw materials. Market participants have reported relatively low purchases from other end-use industries.
Furthermore, Germany's ambitions for energy supply diversification, transition, and a reduction in its "reliance on Russian imports" will be aided by the new LNG import facility at the Brunsbüttel Elbe port. The all-time high inflation has started dropping markedly in the domestic region after trending at 10% or higher in the last quarter of 2022. The economic activities have slowed down as a significant contraction in trade volumes has been reported.
According to the pricing intelligence of ChemAnalyst, the prices of Calcium Hydroxide might dip in the German market. The fluctuations in raw materials prices and manufacturing costs will likely restrain the Calcium Hydroxide market growth. Procurement from the end-of-use industries is also anticipated to remain stable to weak, as the manufacturers will be more focused on releasing the existing stockpiles.