A String of Upstream Headwinds Propels German Calcium Hydroxide Prices on an Upward Trajectory

Hamburg, Germany: The burgeoning cost of energy materials and the supply chain disruption across the European region have hampered the market sentiments for Calcium Hydroxide. The price trend of Calcium Hydroxide has been on an uptrend since the start of the third quarter of 2022. However, the winter restocking has been saturated, and natural gas prices have been trending lower, as confirmed by the current market dynamics. The large LNG import capacity of almost 26 million mt/year and total storage stocks have well-positioned France to support Germany in the natural gas crisis.

According to a survey channeled by the Confederation of European Paper Industries (CEPI), two-thirds of paper producers on the continent have cut their production, and over half have temporarily closed. The energy-intensive Calcium Hydroxide industries have been buffeted by the region's curtailed supply of natural gas. In addition, demand from the downstream construction sector has also weakened as procurement has been unbalanced amid slumped construction activities in the regional markets. The ChemAnalyst data shows that the Calcium Hydroxide has demonstrated an increment of approximately USD 22 per tonne with a monthly escalation of 5% in the German domestic market.

On the upstream front, OPEC and its allies, on Oct. 5, 2022, slashed their production quotas of crude oil by 2 million b/d for the next 14 months as the economies across Asia, North America, and Europe struggled to gain momentum. Additionally, In Europe, the refinery strikes in France have tightened the diesel market, compounding the challenges that emerged from the conflicts between Russia and European nations.

As per ChemAnalyst, The pricing dynamics of Calcium Hydroxide could be sustained forward in the European region amid the production cutbacks across the central economic zone of Europe. In addition, the hiked interest rates have slackened construction activities. Thus, market participants anticipated that the deteriorating demand might intrude downside risks to the market growth of Calcium Hydroxide in the forthcoming weeks.