How Uncertainties Induced by Russia-Ukraine war is affecting Fumed Silica Market

As per the latest assessment by ChemAnalyst, Fumed Silica market has been facing global uncertainties for a long time, while demand for the product has showcased a steep rebound in the past few months. The major factors behind these rises were supply disruption in the global market under the influence of COVID restrictions in China, escalated conflict between Russia and Ukraine, soaring crude oil value, and so on.

Talking about Asia pacific region, a rise of around 4.6%, 5.5%, 4.5%, and 1% was noted for China, Japan, South Korea, and India, respectively, during the February to March timeframe. According to market sources, under the influence of disrupted trade activities in the regional market, procurers faced difficulties in procuring raw materials, making it hard for them to maintain price stability. The prime factors behind these increments for Fumed Silica in APAC countries were rising freight costs due to soaring crude oil value and sudden increment in COVID cases in the major exporting country, i.e., China. China has been facing disturbance in trade activities since Q4 of 2021 due to a coal shortage that initiated dual-energy policy-related restrictions all over the country, which was later exacerbated by the worst hit of a pandemic since 2020. 

Meanwhile, Europe and USA were primarily disturbed by escalated tension between Russia and Ukraine due to geopolitical issues, which hampered the trade activities across the Black Sea. Furthermore, demand for the product across the European market remained stable for the firm as Germany recovered from pandemic-related restrictions during February. As per the analysis, a rise of around 4.3% and 4.5% was observed during a similar timeframe in Belgium and Germany. However, the tension between Russia and Ukraine has dented the global market sentiments and injected uncertainties on the ground of the looming threat of natural gas scarcity. Meanwhile, natural gas prices have skyrocketed again in Europe post this war, while the USA has also faced the heat of rising LNG prices in the country, bearing the burden of inflation.

As per the ChemAnalyst analysis, Fumed Silica prices are expected to remain firm during April 2022, on the back of the unending war situation in Ukraine despite hefty sanctions imposed by key economies. Furthermore, despite the fact that the USA initiated to calm crude oil value by releasing strategic reserves, the current decline in crude oil value is anticipated as temporary, and another resurgence is expected in the near term.