A Downturn in Construction Sector Deteriorates Sodium Silicate Market in Europe

The price of Sodium Silicate remained in a declining pattern in Eurozone amid the poor performance from the downstream construction sector at the conclusion of the second quarter of 2023.

The recent German construction Purchase Managers Index (PMI) data shows a drop in June 2023 compared to the previous month, signaling a noticeable acceleration in the rate of decline in building activity across the Eurozone's largest economy. The primary headwinds faced by the construction industry were rising interest rates, an uncertain economy, and wider inflationary pressure in the country.

German construction companies decreased purchasing activity, showing the biggest drop in June 2023. New work orders for Sodium Silicate from the firms remained dropped month-over-month amid a backdrop of interest rates, customer uncertainty, and broad inflationary pressure in the largest economy of the Eurozone.

The above factors indicate that the demand for Sodium Silicate and consumption of the material declined due to the dampened construction activities in the German market. The market had enough material to meet the requirements of the construction sector and other allied industries such as detergent, wastewater treatment plants, etc. This poor demand for Sodium Silicate to manufacture construction materials and other products helped to alleviate the pressure on supply chains in June 2023. This was highlighted by a sustained significant enhancement in the lead times for purchases.

On the other hand, France had the same situation and followed the same price pattern for Sodium Silicate at the end of the second quarter of 2023. French construction companies noted another reduction in new order intakes in June due to the lower demand for Sodium Silicate across the country. Another factor limiting cost pressure was the improvement in supply chain conditions. French builders stated faster delivery times in June. In addition, the purchasing activity in eurozone construction companies remained downturn for the thirteenth successive month in June.

After experiencing a declining trend, the price of Sodium Silicate was settled at USD 290/MT on a FOB Hamburg basis at the end of the second quarter of 2023.

The Sodium Silicate market is expected to decline in the coming months as the difficult environment continues at least into next year, and most companies expect a decline in activity over the next 12 months. In addition, builders are the most pessimistic about this year's prospects in the eurozone area. The Sodium Silicate market was approximately declined by 2% to 2.5% in June 2023.