Sluggish Downstream Demand Undermines the Calcium Hydroxide Market Sentiments in China
- 05-Jul-2022 4:02 PM
- Journalist: Nina Jiang
Shanghai, China: Declining demand from the downstream construction sector has dwindled the market sentiments toward Calcium Hydroxide in the domestic region of China. Staggering inquiries from the terminal end and deflated input costs have weighed on the market to follow a bearish trend.
As per the observed market scenario, the profit margins of the construction firms have contracted amid the suppressed construction activities. Thus, factories were operating at limited capacities to maintain the equilibrium between supply and demand. The recent data from ChemAnalyst shows that the price realizations of Calcium Hydroxide have dropped significantly, indicating a decrement of USD 35 per ton in June from the prices observed in May 2022.
In addition, the limited purchasing and deterred trading environment from the last few months due to pandemic-related restrictions have substantially prompted severe input cost pressure on the downstream cement manufacturers. The backlog of deliveries has prompted the traders to reduce the quotations. As a result of sluggish downstream demand, the spot prices of Calcium Hydroxide plunged further in China.
Furthermore, the fear of the global recession has dampened the market's sentiments toward Calcium Hydroxide. The tight monetary policy and high-interest rates imposed by the Federal Reserves in the USA have drastically pressured the benchmark prices of significant energy raw materials. Despite curtailed supply amid lower OPEC output, the upstream crude oil prices sharply plummeted because of recession concerns. The political unrest in Libya, and European sanctions on Russia amid its invasion of Ukraine, also have a cumulative effect on the steep fall in global oil prices.
As per the pricing intelligence of ChemAnalyst, the price trend of Calcium Hydroxide may follow a downward trend amid sluggish terminal demand and fluctuating energy costs. The Chinese economy has been long captivated by pandemic afflictions, and it will continue to showcase its disproportionate negative impacts on the market sentiments of Calcium Hydroxide in the forthcoming weeks.