Slackening Downstream Demand Constrains the Market Growth of Calcium Carbide
- 16-Nov-2022 3:03 PM
- Journalist: Robert Hume
The prices of Calcium Carbide have been demonstrating a sliding trajectory across the globe. The COVID-19 pandemic, fused with political and economic crises worldwide, has upended the transportation and distribution of chemicals, including Calcium Carbide and its derivatives. The impact of Western sanctions on Russian oil exports has brought uncertainties to the energy market. This week, the major input material, crude oil, impacting the operational costs of several key commodities used in the construction sector, has settled higher as Crude oil supply to Hungary via the Druzhba oil pipeline has been temporarily halted amidst the pressure drop.
In China, COVID cases climbed in the fourth quarter of 2022, slowing factory output growth. In addition, the fuel consumption in the world's top importing nation has decreased, affecting the market sentiments for Calcium Carbide. However, with the strict COVID-19 policies imposed, a gradual decrement in the number of infected cases has started, easing the logistics and transportation. The market players have reported that the downstream operations of Calcium Carbide needed to be increased, and the procurement from downstream Acetylene and derivative industries was just on a need-on-demand basis.
Furthermore, the all-time high inflation in the USA is starting to ease, which could allow the US Federal Reserve to slow down its aggressive interest rate hikes. Moreover, the port congestion has also been relaxed, and the inventory pressure has been diminished. As a result, the upward momentum in the price realization of Calcium Carbide has been clogged. On the other hand, the German market has been witnessing burgeoning natural gas prices from last quarter, severely impacting the manufacturing index in the domestic region and Calcium Carbide demand from the end-use industries.
As per ChemAnalyst, the price trends of Calcium Carbide will remain under pressure as demand fundamentals are not likely to improve amidst rising COVID cases and global economic challenges. The easing of supply-chain pressure will allow trade activities to flourish further. It is anticipated that the market fundamentals for Calcium Carbide will likely improve, and the prices will gain downward momentum with a slide in upstream raw material prices.