Asian Quicklime Prices Observed a Bearish Trend Amidst Weak Demand

The Quicklime price trend took a downward momentum in December 2022, owing to the slow offers from the downstream industries, such as Steel production and the Agrochemical industry. Meanwhile, the high inflationary input costs pressure and labor shortages have restricted production activities in the regional market in the last month of 2022.

The lower upstream feedstock Calcium Carbonate prices led to ample availability of stocks of Quicklime in the Chinese market, and insufficient demand from the downstream Steel and Agrochemical sector affected the pricing dynamics of Quicklime in December 2022 in the Chinese market. The production activities in the downstream Steel industry were hampered due to labor shortages and high inflation in the Chinese market. China's annual consumer inflationary costs accelerated in December 2022 and led to constrained economic activity. Conclusively, sellers and traders made offtakes at lower margins by dropping the costs of the commodity in the market amid oversupplied stocks.

Meanwhile, the Quicklime prices turned downside in December 2022 in the Indian market, bolstered by the stability in the downstream Steel producing industry demand and low feedstock Calcium Carbonate costs. Indian steel industries faced limited buying sentiments due to elevated inflation and rising upstream energy prices in the domestic market. At the same time, the high supplies continued to hit the Quicklime demand amid lower input costs pressure at the termination of December 2022. Therefore prices dipped by 3.6% from the November values and hovered at INR 5971/MT Ex-works- Jodhpur (India) for the powder grade (90% Purity) in December 2022. Moreover, the economic slowdown in the Indian market amidst the depreciation of the Indian rupee also remained the factor for the drop in commodity prices at the end of the year.

According to ChemAnalyst anticipation, "Prices of Quicklime are likely to increase due to expected lower demand from the end-user steel industry in the Asian market with an expected rebound in the downstream steel production with rising domestic offers. Additionally, the Quicklime price trend is likely to be influenced by the expected increase of nearly 7% in the Indian economic growth in FY23, and supply constraints are anticipated to affect the price momentum of Quicklime.