Global Caustic Potash Prices Rebound in August 2023 Despite Industry Challenges
- 15-Sep-2023 5:57 PM
- Journalist: Nina Jiang
Caustic Potash prices displayed a reviving trend across the globe during August 2023 and gained a positive outlook for September sales. The US and Chinese prices went up in line with the limited stock availability and marginal improvement in the overseas procurement for Caustic Potash in Asia's fertilizer and agrochemical industries.
In the USA, Caustic Potash prices were upward throughout August 2023 due to inadequate supplies amidst reduced production run rates and rising international inquiries. A survey by the American Chemical Council revealed that the challenges faced by the US chemical manufacturing industry have shifted from supply issues to regulatory burdens. This, coupled with weak domestic demand, has caused Caustic Potash manufacturers to cut their output. Due to regulatory pressures and weakening demand, the survey painted a difficult picture for the US chemical manufacturing industry, including the Chlor Alkali sector. However, the current prices of Caustic Potash increased on account of the escalated demand from the international market, and the shortage of supplies in the line of high input costs provided manufacturers the opportunity to sustain their margins.
In Europe, Caustic Potash prices have fluctuated within a certain range in August 2023, owing to the unchanged demand from the downstream agrochemical industry and limited supplies. Additionally, the Euro depreciated by 1.91% against the US dollar in August 2023, further dampening enthusiasm among regional buyers in the oversupplied Caustic Potash market. Additionally, the domestic market in Germany experienced low order volumes in August 2023, accompanied by a third consecutive month of declining employment rates. From a supply perspective, input costs decreased, and production output also saw a reduction in Germany. In summary, despite the rapid deterioration observed in other sectors during the same month, the main factor contributing to the stability of Caustic Potash prices was the prevailing market sentiments of optimism in August 2023.
The Chinese Caustic Potash prices showed a slow rise in the line of the improving downstream fertilizer and agrochemical industry. Therefore, the market participants opted to raise the prices in August 2023 to sustain their margins amid Seasonal consumption by limiting production run rates in the regional market. Additionally, as per the National Bureau of Statistics of China, in August, the Purchasing Manager Index (PMI) of China's manufacturing industry was 49.7%, an increase of 0.4% from the previous month, and sparks the prosperity level of the manufacturing industry continued to improve.
According to ChemAnalyst, Caustic Potash prices are likely to remain relatively northward globally due to the change in demand, seasonal consumption, and sufficient supplies. While challenges persist in the Caustic Potash industry, there is still some hope for demand despite the global economic challenges.