Construction Sector Downturn Pressures Calcium Carbide Prices in Japan

Tokyo (Japan): During March 2024, Calcium Carbide prices in Japan experienced a decline, primarily driven by sluggish demand in downstream industries such as PVC, steel, and welding. This downturn was exacerbated by a construction slowdown and low import prices from China. Furthermore, globally low prices of feedstock coke and coal further reduced the production costs of Calcium Carbide amidst a slow economic recovery.

The pricing of Calcium Carbide in the domestic market remained weak, reflecting a lack of demand from end-users. Enterprises faced increasing losses, leading some to implement shutdowns or reduce production to alleviate inventory pressures. Despite attempts to address these challenges, demand from downstream industries such as PVC and steel remained subdued, largely due to the slowdown in the construction sector. With housing starting declining and the number of vacant homes rising due to demographic changes, construction activity stagnated. As a result, the Calcium Carbide market experienced a gradual decline, with prices reaching USD 423/MT, CFR Tokyo by March 2024. Japan's property market faced consecutive obstacles, starting with regulatory measures targeting developers' high leverage, which triggered a liquidity crisis.

Manufacturers continued to face low demand, worsened by local government debt in the exporting nation. Additionally, low feedstock coke and coal prices drove down production costs amid a sluggish economic recovery. Coal producers struggled with high inventories and reduced demand. The construction sector slowdown led to fewer inquiries for Calcium Carbide. Despite efforts to boost the property market, demand remained low. In China, declining home sales posed challenges, affecting downstream enthusiasm. Negotiations for Calcium Carbide prices trended lower due to subdued demand. This challenging market environment dampened demand in Japan's PVC and steel industries. Overseas demand, notably from India, remained cautious, anticipating further price declines. Calcium Carbide prices also dropped in the Middle East due to factors like the Ramadan lull and low import prices. Amidst these challenges, manufacturers sought innovative strategies to navigate the tough market conditions and sustain their operations.

ChemAnalyst expects a forthcoming uptick in Calcium Carbide prices, underpinned by anticipated demand growth in both domestic and international markets. This forecast gains strength from Japan's government initiatives aimed at bolstering the construction sector, indicating a favorable trajectory for Calcium Carbide prices. The projected increase in prices mirrors heightened demand across industries such as construction, steel manufacturing, and chemical production, signaling positive market dynamics ahead. Additionally, ongoing efforts to streamline supply chains and optimize production processes are expected to further support price stability and growth in the Calcium Carbide market.