US Barite Market Inches Southward Amid Limited Demand in the Third Week of June 2023

In the week ending June 23, the Barite prices slightly declined in the US market as the demand from the downstream oil and gas industry along with the paint-and-coating sector decreased. The current US economic condition has led to declining demand for oil and gas year-over-year in June 2023. Meanwhile, the demand from the downstream glass industry has been stable. The signing of various new deals in Nevada has also increased the Barite mining activity in the USA.

The supply of Barite is maintained at a much higher level due to increased extraction rates in Nevada, USA. The Nevada Mining companies have announced an initial exploration program on the Agai-Pah property, a major spot for Barite mining. This resulted in higher inventory levels and provoked the domestic suppliers to reduce Barite prices in the US spot market.

Most of the Barite usage comes from the downstream Oil and Gas extraction industry as a drilling fluid to densify the density of mud, decreasing the chances of the pressure gas blowout during extraction. The US Oil and Gas extraction sector has declined by 3.1% in the US market leading to a decline in demand for Barite. The detrimental effects of Barite as the drilling fluid discharge to soil and seawater have been a major concern for the US government because of its insolubility in the natural environment. This concern has led to the use of recycled Barites from the mine pit to reduce their adverse effects, resulting in decreased demand for fresh Barites from the local manufacturers.

Barites serves an important end use in the medical sector as they are insoluble and harmless for the human body. The US medical market has declined by 0.8% this week, leading to a decline in demand for Barite in the US spot market. Furthermore, in the upcoming months, the demand for Barite in the medical and health sector will show a positive trend as its uses will increase for an improved healthcare system.

The downstream automobile sector is declining as General Motors, a major automobile manufacturing industry, declined by 3.5% due to reduced manufacturing activity and compacted sales in the US spot market. Therefore, the domino effect created by the declining automobile sector and reduced demand from the downstream paint and coating industry, which has a major usage of Barite, has ultimately weakened the price in the US spot market.

According to ChemAnalyst, the price of Barite will show a slightly declining trend as the downstream demand from the Oil and Gas Extraction and paint industry is decreasing, but still, hopes are present from the increasing demand from the glass manufacturing industry.