Barite Price Rises in India as an Outcome of Improving Demand Across Industries

In the first half of June, the Indian Barite market witnessed a positive price movement driven by various factors across industries. The price of Barite in Indian domestic market increased by 1%, stabilizing at USD 146/MT Ex Chennai (India).

Barite's role in oil and gas exploration is emphasized by its crucial function as a weighting agent in drilling fluids. India, the world's leading producer of Barite, is witnessing heightened demand from key oil-producing nations. Saudi Arabia relies heavily on Barite for its drilling operations, exemplified by the recent unveiling of a second jack-up rig by ARO Offshore Drilling and International Maritime Industries (IMI), part of a larger initiative to build 20 rigs. In Australia, the Federal Govt’s approval of over 120 new gas wells in southern Queensland further boosts regional demand for Indian Barite. Simultaneously, the UAE's accelerated expansion of oil well drilling underscores the increasing demand for Barite. India locally is also experiencing heightened demand. The recent announcement by the Indian government to auction 26 blocks for oil exploration underscores the strategic importance of enhancing domestic production to reduce dependency on imports amidst global geopolitical uncertainties and price fluctuations. Notably, Oil India Limited (OIL) has secured exploration rights for the Kerala-Konkan offshore block, marking a significant step towards boosting domestic oil production capabilities. These developments highlight India's significant role as a primary exporter of this essential mineral to these thriving markets.

Another major driver of Barite demand lies within the automotive sector, particularly in the realm of paints and coatings and as a weighting filler in rubber compounds. As the demand for superior coating is on the rise, paint companies are exploring possibilities to enter this segment. For example, industry stalwarts JSW Paints, in collaboration with MG Motors, ventured into the automotive paint industry, underscoring the growing significance of coatings in meeting industry standards and consumer demands. Demand from the USA for the mineral can be contributed to a significant increase in the sales of automobiles in the country as customer demand for high end coating is on the rise. With the automotive sector poised for continuous growth, the demand for Barite is set to escalate as it finds application as a weighting filler in rubber compounds, crucially in the manufacturing of mud flaps for trucks.

Apart from the domestic production and availability of Barite, Indian traders also import from China and Japan. Recently, a significant shortage in ocean freight capacity across major trade routes has led to a sharp increase in freight rates. Taking advantage of this situation, ocean carriers have implemented General Rate Increases (GRIs), Peak Season Surcharges (PSS), and various other charges. The demand trajectory for Barite remains robust, promising continued growth and innovation across automotive, medical, and energy sectors alike. As a result, the prices of Barite in Asia have escalated.