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Global Paint Industry Performance Slumps, Affecting Iron Oxide Prices in July 2023
Global Paint Industry Performance Slumps, Affecting Iron Oxide Prices in July 2023

Global Paint Industry Performance Slumps, Affecting Iron Oxide Prices in July 2023

  • 17-Aug-2023 6:00 PM
  • Journalist: Gabreilla Figueroa

Prices of Iron Oxide witnessed a bearish trend throughout July 2023 in the countries of China, Indonesia, Brazil, the United States of America, and Germany, with costs deprecating by approximately 4% in the United States and Brazil, 3.5% in China and Indonesia and 1% in Germany.

In the United States, key market players in the manufacturing of Iron Oxide, such as LANXESS AG and BASF SE, reported a decline in sales in surface coating pigments in the second quarter of 2023. Furthermore, financial reports for the 2nd Quarter of 2023 for LANXESS AG reported a decline of profits by almost 36% as compared to 2nd Quarter of 2022. Even financial reports of BASF SE reported a depreciation of sales volume of more than 19% in surface coating technology and pigment. LANXESS reports further state that as energy costs surge in the United States, the uncertainties are likely to extend to the 3rd Quarter of 2023. Both BASF and LANXESS AG report that the demand from the downstream pigment and paint coating industry was not healthy enough to overcome the bearish situation of the market for Iron Oxide.

In Brazil, key market players in Iron Oxide manufacturing, such as Usiminas, reported declination in the net income of approximately 3% in the 2nd Quarter of 2023 in comparison to a surge in sales of approximately 18% in the 1st Quarter of 2023, as paint industry failed to perform satisfactorily in the 2nd Quarter of 2023. Moreover, energy costs in Brazil are likely to increase as inflation is likely to hit approximately 4% in July 2023, which was reported to be declining till the month of June. Expectations in the increments of inflationary rates in July 2023 are further likely to extend the bearish situation of the market for Iron Oxide.

In the Chinese and Indonesian markets, financial reports of LANXESS and Chemetall GmbH state a decline in the sales of Iron Oxide of an average of 23% in the month of July 2023 as compared to June 2023 as China's economy enters deflation and construction activities being halted due to severe floods being reported in parts of Indonesia as a cause of heavy rains.

In Germany, prices of Iron Oxide reported a marginal decline of approximately 1%. Even though inflation rates cooled from 6.4% in June to 6.1% in July, PMI is also expected to drop from 40. 6 to 38.8 in July 2023, indicating minimal activities in the manufacturing sector. This was even backed up by the declining sales in the paints and coating segments, with both BASF SE and Merck Kaag reporting a decline in the sales of Iron Oxide pigments.

Overall, prices of Iron Oxide are expected to depreciate globally further, as negative sentiments in the market prevail due to insufficient recovery of the global economy. However, Iron Oxide prices may rise towards the end as economic conditions are expected to improve.

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