For the Quarter Ending December 2022
North America
The US Fumed Silica market remained underwhelmed throughout the quarter owing to low demand from the domestic downstream sectors amidst the abundance of the product in the country. Downstream industries' performance outlook stood upon expectations and remained dull throughout this timeframe. Supplies remained firm throughout the quarter, while inventories level heard remained abundant to satisfy all the needs of the country. However, producers were cutting production under expectations of low demand in the coming months. Demand for the product remained dull during this month, as the overall factory output of the country declined during the month of November 2022. However, as per the market experts, the recession might not appear this year and will in the short term in 2023.
Asia
Prolonged dullness in demand from the domestic as well as international market led to a significant fall in the price of Fumed Silica during this month again in the Asian market. Rising pandemic-related uncertainties injected uncertainties among the domestic key players of China. Supplies remained ample enough to satisfy all the needs of the country as well as the overseas market. Regardless of ongoing uncertainties in the market, supplies remained unaffected throughout this timeframe. Demand dynamics remained affected due to prolonged pandemic-related uncertainties that kept on affecting the economic output of the country. Furthermore, demand for the product from the downstream construction sector remained low, as the segment was still struggling to gain momentum.
Europe
The European market has been facing an issue of a consistent fall in demand for a long time. As per the December market scenarios, Fumed Silica prices fell in the regional market owing to prolonged demand dullness and the Christmas holidays during the second half of the month. Supplies remained ample enough to satisfy all the needs of the region, while Natural gas prices have also eased in the regional market. The data shows a decline of around 45% in the Dutch TTF Natural gas future during the month of December, posing optimism and easing the price trend of different commodities. As per the data, inflationary pressure has eased in the market, which has now threatened the region with the approaching recession. Therefore, traders have cut their imports and opted for wait and see approach. Furthermore, pessimistic market scenarios are also making consumers reluctant to buy cargo for future months.
For the Quarter Ending September 2022
North America
A Houston-based market source revealed to ChemAnalyst that the market movement shifted in a different direction when the central government announced a revision in interest rates in the country. The decision led the economic activities to slow down, which was essential to calm the inflationary pressure in the USA. However, market activities were already slow due to high raw material costs, and traders were opting for the wait-and-see approach. Nevertheless, Fumed Silica prices have traced an overall uptrend during July and started plummeting afterward in the USA, primarily driven by prolonged inflationary pressure in the country. Thus, Fumed Silica's price in the USA hovered around USD 7240/MT during September 2022.
Asia
Marginal positive price revision was observed for Fumed Silica in Japan during July 2022, owing to stable demand from the domestic as well as international market, which later kept on falling in the domestic market. As per the data, Fumed Silica prices showcased a decline during August and September post witnessing consistent price revisions for several months. However, market players revealed that the demand was revised to slow down again in the market, owing to the slowing economic activities of the overseas market. Thus, post witnessing a hike, Fumed Silica Price in Japan Hovered around USD 7540/MT during July 2022.
Europe
As per the data, the European Fumed Silica market witnessed an uptrend during the first month of the quarter owing to rising inflationary pressure and supply disruption caused by the Russo-Ukrainian war. During Q3, Russia announced to curb supplies of Natural gas to Germany, which made converters more cautious about the procurements. The Manufacturing Purchasing Managers' Index, the PMI index of Europe, hit 49.8 points in July 2022, 2.3 lower than the previous month. Thus, the recession also affected the overall demand fundamentals for the coming months; thus, domestic players started looking forward to delaying imports. Conclusively, post witnessing a rise of around 1.5%, Fumed Silica prices assessed around USD 7640/MT during July 2022.
Prices for North American Fumed Silica remained high throughout the second quarter of 2022 due to growing raw material costs and steady global demand. According to a Houston-based market source, several construction-related raw materials' prices continued to rise during the quarter, with a heavy burden of inflationary pressure remaining the main driving cause. Additionally, the ongoing Russo-Ukrainian War's impact on natural gas prices during the second quarter impacted the product's pricing dynamics across the US market. The product's demand dynamics from the construction and adhesive industries further supported the regular shipments to domestic and overseas markets.
Long-standing global uncertainty had been hurting the Asian market for Fumed Silica, although in the second part of the quarter, demand for the product showed a sharp recovery. The primary causes of these increases were supply disruption on the international market caused by COVID regulations in China, the escalating crisis between Russia and Ukraine, the rising price of crude oil, and so on. In addition, China's pandemic-related uncertainty has put pressure on regional supply dynamics, which led to a supply gap that was subsequently filled by Japanese cargoes. The primary causes of these increases in demand for Fumed Silica in APAC nations were rising freight costs due to rising crude oil prices and a sudden rise of COVID cases in China, the key exporting nation.
According to ChemAnalyst's evaluation, it was seen that the price of Fumed Silica increased significantly in the second half of the quarter after rising steadily in the first half. A major producer of Fumed Silica, Cabot, announced a 15% price increase for the global market beginning in July. As a result, the market for Fumed Silica in Europe continued to trend upward. Furthermore, given that the country's producer price index has already risen enough to support this upward trend, this price increase was primarily driven by high input costs and intense inflationary pressure on producers.
