Despite a drop in inflation and energy prices in the European region, weaker demand from the downstream construction sector faltered market growth of Calcium Carbonate. The economic activities have also slowed down in Germany as the retaliatory effect of the fallout between Russia and Ukraine. The macro factors such as high inflation, volatility in energy costs, and deterred purchasing sentiments have a cumulative effect on the downshift observed in the price realizations of Calcium Carbonate. The European Central Bank (ECB) has been pushed into extreme monetary tightening to rein in the spiraling inflationary pressures.

In the European market, the volume of new Calcium Carbonate contracts concluded was far below the expectations raised by the market players at the start of the second quarter of 2023. The cost support from upstream Pet Coke also plunged as the prices have been settling below USD 100, an all-time low from 2021, following an ample supply. Moreover, the ChemAnalyst database has shown that the pricing dynamics of Calcium Carbonate have contracted by approximately 5% in late Q1 on an m-o-m basis in Germany.

Furthermore, in the domestic region of China, the progress on the construction sites has been slowed due to rainy weather, exacerbating the price concerns for upstream raw materials, including Calcium Carbonate. On the upstream input material front, prices of Coal have also plummeted amid average market transactions. The unwillingness of market players to build up the inventories has supported the downshift observed in the price realizations of Calcium Carbonate.

According to the pricing intelligence of ChemAnalyst, the prices of Calcium Carbonate are expected to remain under pressure amid ease in upstream raw material costs. From the second half of this year, a further slowdown is also anticipated based on the dropping amount of new inquiries. In addition, if the European Central Bank would further increase the interest rates to combat inflation, the profitability of manufacturing firms is more likely to be subdued in the near term, dragging down the market fundamentals of Calcium Carbonate.