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Dwindling Upstream Costs Undermine Calcium Carbonate Market Sentiments in India
Dwindling Upstream Costs Undermine Calcium Carbonate Market Sentiments in India

Dwindling Upstream Costs Undermine Calcium Carbonate Market Sentiments in India

  • 22-Jul-2022 5:21 PM
  • Journalist: Jai Sen

New Delhi, India: The Indian domestic market witnessed the contracted calcium carbonate prices this week. The decline in raw material costs and diminishing demand from the downstream construction sector have subdued the market sentiments towards Calcium Carbonate.

As per the latest data, the price offers of Calcium Carbonate have demonstrated a steep downfall of nearly 5.6%, showing a decrement of almost 14 USD on July 22nd, 2022, compared to the previous week’s prices. The downstream market players from the construction sector were reluctant to buy Russian coal and Venezuelan pet coke due to their low sulfur content and economic costs. Thus, the Indian import prices of Pet Coke were observed to be corrected by nearly 12% in July 2022 on a month-to-month basis. Additionally, MRPL, a top Indian market participant, has decreased its pet coke prices by approximately 24 USD entering July, witnessing the uncertainties in the terminal sector.

Furthermore, the onset of the monsoon season in India has obstructed construction activities, leading to sluggish demand for downstream cement. The plunging offtakes for construction materials have substantially burdened the market sentiments for upstream raw material, Calcium Carbonate. Thus, low domestic demand prevented manufacturers from raising cement prices, which has pressured their profit margins. As a result, a leading market player in the downstream construction sector, Heidelberg Cement, reported a decline of nearly 25% in its net profit at the second quarter-end of 2022. The contracted profit margins were mainly attributed to the surge in operational costs brought on by an unprecedented rise in coal, freight, and packaging charges.

As per ChemAnalyst, the price trend of Calcium Carbonate will witness a bullish trend in the domestic market of India. The declining values of upstream raw materials will likely prompt negative cost pressure on the price value chain of Calcium Carbonate and its derivatives. Additionally, the downscaled construction activities amidst the ongoing monsoon season will likely offset the market sentiments toward Calcium Carbonate in the forthcoming weeks.

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