Persistent Decline in Potassium Silicate Prices as Eurozone Construction Industry Faces Downturn
Persistent Decline in Potassium Silicate Prices as Eurozone Construction Industry Faces Downturn

Persistent Decline in Potassium Silicate Prices as Eurozone Construction Industry Faces Downturn

  • 08-Sep-2023 4:37 PM
  • Journalist: Yage Kwon

The price of Potassium Silicate exhibited a continuous decline in the Eurozone, primarily due to the sharp downturn in the construction industry, exacerbated by the impact of rising interest rates. This decline was further accentuated by a significant reduction in housing activity within the German construction sector during the third quarter. Residential building projects experienced a substantial decrease in activity. In response to these challenges, building companies remained in a cost-cutting mode, implementing significant reductions in employment and purchasing activities. These factors collectively indicate that the demand for Potassium Silicate within the construction, cement, and pottery sectors remained weak throughout August. The availability of Potassium Silicate has remained abundant to meet domestic demands. The German construction Purchasing Managers' Index (PMI) remains below the threshold limit, signifying that the construction sector's recovery is expected to be prolonged.

Throughout August, the price of Potassium Silicate hovered around USD 1400/MT on a DDP Hamburg basis, registering a monthly depreciation of 6%.

The construction sector continued to face headwinds, driven by a combination of rising interest rates and cautious behavior among customers. This contributed to a further substantial drop in new orders among Potassium Silicate manufacturers in August. Building companies responded to reduced workloads by reducing staffing levels for the seventeenth consecutive month.

Recent data highlighted that the decline in construction employment across the Eurozone persisted for the sixth consecutive month in August. The pace of job shedding accelerated compared to July, although it remained moderate overall. Companies in both France and Germany signaled further reductions in staff levels, with Germany experiencing the sharpest decline since May 2020.

The latest data revealed a sharp and accelerated downturn in Potassium Silicate purchasing activity within the German construction sector midway through the third quarter. The decreased demand for materials was mirrored by a sixth consecutive monthly improvement in vendor delivery times as pressure on supply chains eased.

Lastly, the data for August indicated a growing sense of pessimism among German constructors. Expectations regarding future activity declined for the fourth consecutive month, reaching their lowest point since November of the previous year and falling further below the long-term average.

It is expected that the price of Potassium Silicate will experience a further decrease, primarily attributed to the downturn in building activity within the German market. Market stakeholders hold a pessimistic outlook regarding the construction sector, given the declining volume of new orders from companies and the accelerated reduction in material procurement, including Potassium Silicate. The potential for an upturn in demand for Potassium Silicate hinges on the construction sector's performance within the broader Eurozone region.

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