European Calcium Hydroxide Market Faces a Downturn Amid Average Terminal Demand and Persistent Inflation

Hamburg (Germany): Throughout May 2024, major economies are reeling from fluctuating energy costs and stubborn inflation, impacting all sectors, including housing, commercial construction, and civil engineering. The construction industry, which depends heavily on chemicals like Calcium Hydroxide and titanium dioxide, is seeing drastically reduced activity due to plummeting demand and a shortage of projects. Although energy prices have dropped and inflationary pressures have started to settle towards the lower end, the purchasing sentiments of the end-use industries have not improved yet.

In France, the Calcium Hydroxide market has experienced a prolonged period of price decline over recent weeks, primarily due to a slowdown in construction projects and diminished demand for essential raw materials like Calcium Hydroxide. Manufacturers have responded by maintaining lower prices of Calcium Hydroxide to stimulate demand within the terminal market. Additionally, support from upstream Calcium oxide has been limited. High interest rates and inflationary pressures have further compounded the situation, affecting the purchasing power of the construction and paper industries in France. The sluggish construction sector has exacerbated the overall decline in Calcium Hydroxide, leading to a reduction in manufacturing activities nationwide.

The persistently high inflation rates have significantly reduced buying power across various industries, resulting in an overall decline in demand. This economic downturn poses challenges for the European Central Bank (ECB) as it navigates inflation rates slightly exceeding its 2% target. In response, the ECB has raised interest rates to moderate demand and lower prices. Furthermore, European gas storage stocks reaching 63.2% of capacity and the front-month natural gas futures trading at less than Euro 31 per megawatt-hour on the French market, nearly half the price of Euro 54/MWh reached last year, have further contributed to the observed price decreases in Calcium Hydroxide.

On the other hand, average inquiries from the downstream construction sector have weakened the Calcium Hydroxide market sentiments in China. The demand from the paper industries also remained moderate, leading to stabilized market operations. In addition, with the ease in upstream Calcium oxide prices, the manufacturing costs of Calcium Hydroxide have also decreased. From January to March, national real estate development investment totaled 2,208.2 billion RMB, marking a year-on-year decrease of 9.5%. Residential investment amounted to 1,658.5 billion RMB, down by 10.5%. During the same period, the construction area of real estate development enterprises was 678.51 million square meters, reflecting a year-on-year decrease of 11.1%.

According to ChemAnalyst’s pricing intelligence, prices for chemicals used in the construction sector, such as Calcium Hydroxide, are likely to continue declining in the European market. Persistent inflation is expected to continue negatively influencing market sentiment for these chemicals in the coming weeks. In addition, the demand for Calcium Hydroxide in the Asian market is likely to remain moderate amid sufficient inventory availability across the regional markets.