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Muted Downstream Demand Impedes the Magnesium Sulphate Market Development Globally

Muted Downstream Demand Impedes the Magnesium Sulphate Market Development Globally

Muted Downstream Demand Impedes the Magnesium Sulphate Market Development Globally

  • 29-Aug-2022 3:46 PM
  • Journalist: Gabreilla Figueroa

The exacerbated supply-side risk has intensified concerns over the production potential for various chemicals, including Magnesium Sulfate. The growing global macro-stresses have impeded the market growth of Magnesium Sulphate across the nations. The ample supplies and sluggish demand from the terminal sector have provoked the pricing dynamics of Magnesium Sulphate to stagger on a downward trajectory in the international market.

In Germany, the logistics problems have been worsening and are leading to an economic slowdown. The climate crisis and energy-supply crunch have deteriorated the market sentiments for Magnesium Sulphate in the domestic region. The market players have reported that the low water level in rivers and the overladen ports with cargoes have created an imbalance in the trade outlook. Furthermore, the ChemAnalyst data has shown that the price trends of Magnesium Sulphate have demonstrated a decrement of nearly USD 22 per ton on a month-to-month basis. The plummeted Magnesium Sulphate values have been attributed to the negative cost support from the upstream raw materials such as Sulphuric acid and the subdued demand from the downstream agricultural sector. In addition, the rapid interest rate increases by the U.S. Federal Reserve to combat inflation have slid the euro's value against the dollar, widening the trade deficit with overseas countries.

On the other hand, in China, the pullback in production activities amidst global economic challenges and the reduced inquiries from the downstream end-use industries have persuaded the equilibrium between supply and demand for Magnesium Sulphate. The prices of upstream Sulphuric Acid have significantly dropped by approximately 8% in the fourth week of August 2022 amid soaring inventory levels in the domestic region of China. In addition, the irregular energy supply has further added to the downstream agricultural sector's woes, hampering Magnesium Sulfate's market fundamentals.

As per ChemAnalyst, the price trends of Magnesium Sulphate will remain volatile in the global region. The energy supply crunch will likely take a toll on the global agricultural market. In addition, extreme weather events and climate change will further impact the demand outlook from the downstream agricultural sector in the forthcoming weeks.

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