Retarding Demand from the Downstream Sector Drags Magnesium Chloride Prices in the US
- 24-May-2023 1:35 PM
- Journalist: Patrick Knight
Magnesium Chloride prices dwindled in the US market amidst the weak demand from end-use manufacturing units that is food, agricultural, and other minor services. The lower Magnesium chloride inquiries dragged the overall demand outlook for the product as the consumer prices climbed again in the previous month in the US. The interest rate continued to remain on the higher edge in the fifth month of 2023 while underlying inflation remained high, indicating that further decreases in inflation are likely to be slow and uneven in the country. As the contractors felt the pressure to gain higher profits amidst the slow demand from the downstream (construction and fertilizer) sector, the overall price dynamics of Magnesium Chloride remained on the lower edge, and price quotations ranged between USD 500-540 per MT, FOB Texas.
Magnesium Chloride applications in agricultural sectors also remained on the lower edge as the harvesting duration is just around the corner leading to slower demand from the fertilizer sector. Consumers showcased a minor interest in placing higher orders and showcased fewer Magnesium Chloride inquiries. Moreover, the extraction procedure of the Magnesium Chloride, along with the demand offtakes from domestic and international markets, governed the overall market dynamics of Magnesium Chloride.
High inflation has been a huge burden for American households, a threat to the economy, and a difficult challenge for the Fed for more than two years. Since 2022, the central bank has hiked its benchmark interest rate in an attempt to bring inflation back down. Apart from making borrowing significantly more expensive for consumers and businesses, increased interest rates have contributed to the failure of three large banks in the last two months and an anticipated reduction in bank lending. As per ChemAnalyst, Magnesium Chloride prices are expected to stabilize in the upcoming quarter of 2023 on account of stable demand and moderate production costs in the US market.