In India, the prices of various commodities, including bulk chemicals, are consistently increasing due to logistical and other constraints induced by the second variant of the COVID known as Omicron. Increased prices of upstream Silica and skyrocketed freight charges have resulted in a hike in the prices of Colloidal Silicon Dioxide in the Indian domestic market. As per ChemAnalyst, Ex-Mumbai Colloidal Silicon Dioxide prices escalated from USD 7557/MT To USD 8000/MT, showing an increment of 5.86% from the last week of November to the first week of January.

A strong rebound in India’s economic activity has strengthened the gross domestic product (GDP) growth in the second quarter of 2021 but rising inflation in the fourth quarter has disrupted the recovery. According to market experts, data suggests that inflation is gradually rising across the country on the back of the increasing raw material prices, high freight cost, port congestion, low inventories, etc., among which the freight charges are unlikely to get better anytime soon.

The use of glob Congestion at major regional transhipment ports has resulted in the reduced container sailing capacity, causing backlogs in export shipments which is likely to exacerbate the prices of several commodities in the near term. Shipping rates have also significantly increased across some of the busiest sea routes in India, further supporting the price trend of Colloidal Silicon Dioxide in the Indian domestic market.

Container costs from China to India have increased fifteen times in the month of December, due to which the manufacturers have increased the prices of Colloidal Silicon Dioxide in the market. Following the volatile nature of the current shipping networks and soaring raw material costs, the prices of Colloidal Silicon Dioxide are likely to increase by 10- 11% in the upcoming weeks further.

What lies ahead?

As per ChemAnalyst, the prices of Colloidal Silicon Dioxide are anticipated to increase further in the forthcoming period due to the disrupted import of raw materials from China, which is not likely to get any better until February as the holiday season is approaching.