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Falling Demand for Potassium Silicate Amid Deteriorating German Construction Industry
Falling Demand for Potassium Silicate Amid Deteriorating German Construction Industry

Falling Demand for Potassium Silicate Amid Deteriorating German Construction Industry

  • 26-Jun-2023 4:59 PM
  • Journalist: Nicholas Seifield

The price of Potassium Silicate is likely to decline in the German market due to the downturn in the construction industry. Potassium Silicates are primarily used in cement, building properties, and other applications. The main reasons for this trend are probably still lower demand for Potassium Silicates due to higher financing costs and persistently high inflation. With the fall of the real estate sentiment in the second quarter compared to the beginning of the year, the situation in the German housing sector has become even tougher. Companies are becoming increasingly burdened by the unfavorable market environment, in which interest rates are currently excessively high in relation to real estate.

Building activity continues to decline in June across Germany due to the slump in residential construction work. The market participants say, Business activity in Germany significantly slowed this month as service sector growth slowed and the industrial downturn deepened. There was a further weakening in confidence in the outlook for business activities in the rest of 2023.

Over the last week, the construction industry has dropped by 2.2%, which shows that the demand for Potassium Silicate in this industry remained subdues in the German market.

New orders fell slightly faster in May and will continue to decline in June 2023, so the industry is not expected to recover anytime soon. The decrease in demand for Potassium Silicates is also reflected in the fact that the delivery times of construction materials have been significantly shortened, and the availability of subcontractors has significantly improved. Easing cost pressures and increased competition for new work meant that German producers were reluctant to raise prices.

According to ChemAnalyst, the cost of Potassium Silicate hovered around approximately USD 1446/MT to 1493/MT on a DDP Hamburg basis in June 2023.

Construction activity in German has been contracting since the second quarter of 2022, and construction companies believe the situation is more likely to worsen than improve for the next 12 months. However, Residential activities are a major headache for the German construction industry. Now German is facing a recession, and rising inflation rates in the region might dampen the demand for Potassium Silicates in the construction and cement manufacturing industries. It is expected that the price of Potassium Silicate is likely to decline in the upcoming months due to the poor performance from the downstream industries. The price of Potassium Silicate is anticipated to decline by 2.5% in June 2023.

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