Slowing Consumption from Construction Sector Weighs Upon European Calcium Hydroxide Market

Over the past few months, the slowdown in the construction sector has been severely impacting the demand dynamics of multiple chemicals commodities, including Calcium Hydroxide.  Despite declining production volumes and weak manufacturing activities, manufacturers have faced challenges in maintaining profit margins, pressuring the Calcium Hydroxide market fundamentals. As per the market sources, demand from the downstream construction and paper industries has remained lukewarm, failing to provide the expected boost. The ongoing stagnation in the EU construction sector has further dampened demand, as reduced activity in construction directly impacts the need for Calcium Hydroxide. Since early 2023, macroeconomic issues and market uncertainty have been weighing heavily on the sector, contributing to the overall decline in prices.

According to the ChemAnalyst database, the price of Calcium Hydroxide decreased by about USD 7 per ton in July 2024. Despite strong government support and investment, Germany's construction sector continues to struggle, negatively impacting the Calcium Hydroxide market. The construction sector, a key consumer of Calcium Hydroxide, has been in a prolonged slump, with sentiment and expectations hitting record lows earlier this year. This persistent weakness in construction has led to subdued demand for Calcium Hydroxide, affecting market dynamics and contributing to ongoing challenges in the industry. As a result, any near-term recovery in demand from the construction sector seems unlikely, keeping the market under pressure.

On the other hand, according to data from the National Bureau of Statistics, China produced 850 million tons of cement in the first half of this year, marking a 10% decline compared to the same period last year (using comparable metrics). This production level is the lowest since the first half of 2011, and it is comparable to the figures from the same period in 2010. Furthermore, paper mills are operating steadily, ensuring a sufficient supply of spot goods. However, inconsistent policy implementation has led most mills to stabilize prices and ship goods, causing only slight fluctuations in market transactions in some areas. Despite this, sales and shipments have not picked up, leaving most Calcium Hydroxide companies with high inventory levels and a flat market supply.

According to the pricing intelligence of ChemAnalyst, the prices of Calcium Hydroxide might remain on the lower end in the Asian markets. The monsoon and off-season are likely to weigh upon the construction activities, impacting the demands fundamentals of upstream raw materials, including Calcium Hydroxide.  In the European markets, Broader economic challenges, including inflation and high interest rates, coupled with the ongoing holiday season have further strained the sector, expecting to reduce the demand for Calcium Hydroxide in the forthcoming weeks.