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US Calcium Carbide Demand Slump Amid Downturn in Construction Sector
US Calcium Carbide Demand Slump Amid Downturn in Construction Sector

US Calcium Carbide Demand Slump Amid Downturn in Construction Sector

  • 21-Dec-2023 5:46 PM
  • Journalist: Patrick Knight

In November, there was a drop in oil and natural gas markets, with crude oil prices reaching their lowest point in over three months. The international benchmark, Brent crude futures, went down by 25 cents to $81.36 per barrel, and US crude futures saw a steeper decline, falling 35 cents to $77.02 per barrel. These prices were the lowest since July 24, raising concerns for the energy market. The main reason for this sudden decrease was a significant increase in US crude oil supplies, reported by industry data. According to the American Petroleum Institute, US crude oil stocks surged by nearly 12 million barrels in the past week, putting pressure on oil prices. This decline in oil and natural gas prices also reduced Calcium Carbide prices, as it helped lower production costs. Calcium Carbide, with the chemical formula CaC2, is produced commercially by reacting calcium oxide (lime), CaO, and CO2 with coke at an appropriate temperature. It is also produced in labs by the thermal decomposition of pure calcium cyanamide in the presence of carbon. The main demand for Calcium Carbide comes from the pharmaceutical and dye industries and the steel industry. In October, the sales of new US single-family homes experienced a larger-than-anticipated decline. This downturn was attributed to elevated mortgage rates, which deterred potential buyers despite efforts by builders to reduce prices.

In November, the price of Calcium Carbide in the US market turned negative compared to October. This shift was mainly influenced by sufficient supplies of calcium carbide, causing a drop in its prices, and the decrease in raw material contributed to a downward trend in Calcium Carbide prices. As the prices of calcium carbide decrease with the decline in upstream oil and natural gas prices, the production costs also go down. Calcium Carbide prices are expected to decrease sharply in the coming weeks due to high inventories and fewer customer inquiries. Sellers are likely to lower prices to encourage more market transactions. In November, the US manufacturing sector contracted, with the Manufacturing PMI registering 46.7 percent, indicating a slowdown in manufacturing.

On November 2, the natural gas prices dropped by -0.96% to 288.60, mainly due to high output levels and predictions of milder weather. Anticipated lower demand for heating in the next two weeks and a 74 billion cubic feet increase in US gas storage, although slightly below expectations, contribute to this decrease. Recent reports indicate that European natural gas procurements have been completed, relieving pressure on global prices. This stability in natural gas prices has led to saturated production costs for various chemicals and petrochemicals, including Calcium Carbide. The consistent production cost of Calcium Carbide has resulted in steady prices from producers.

As per the  ChemAnalyst database, Calcium Carbide demand is expected to decrease due to heavy destocking market activity expected in December.  

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