Hamburg, Germany: In the last month of 2023, the prices of Calcium Hydroxide were observed to be on the higher end in the domestic market of Germany. Limited production activities in the previous quarters have raised supply-side concerns for Calcium Hydroxide manufacturing firms. Despite subdued demand from the downstream construction sector, Calcium Hydroxide manufacturers have raised their offers. Additionally, persistent tensions in the Red Sea or a broader conflict in the Middle East would significantly impact oil markets, triggering a substantial geopolitical shock. On January 12th, 2024, after the strike, oil prices rose by more than 2.5%. An abrupt increase in oil prices can lead to several economic outcomes, such as inflation, lower consumer spending, a worldwide economic downturn, adverse impacts on energy-intensive industries, currency depreciation for oil-dependent nations, and heightened geopolitical tensions.

According to the ChemAnalyst database, the prices of Calcium Hydroxide have demonstrated an increment of approximately USD 10 per ton across European nations. Limited production activities caused by year-end holidays have induced supply-side fears. Despite persistently low demand, Calcium Hydroxide manufacturers have increased their prices to maintain profitability in the face of reduced output. This price adjustment has occurred in response to production constraints, aiming to align revenues with the decreased supply of Calcium Hydroxide. According to INSEE, the residential construction sector in France has slowed down, with a 27.3% drop in building permits issued and a 23.8% decrease in projects starting construction during the first 11 months of the year, slowing down the procurement volumes of upstream raw materials such as Calcium Hydroxide.

Furthermore, in December, France's Construction PMI also dropped to 42.6 from November's 44.6, indicating a faster rate of decline in building activities across the country. On the input energy front, to reduce reliance on natural gas imports from Russia, Europe increased its purchases of liquefied natural gas (LNG), bolstered gas reserves in storage facilities, and raised the proportion of renewable energy to meet the demand from downstream manufacturing firms. As a result, gas prices have not significantly increased over the past weeks and remain in the low €30 per megawatt-hour (MWh), relative to price spikes seen during the worst of the crisis in 2022 at above €300 per MWh, alleviating constraints from Calcium Hydroxide manufacturing costs.

According to the pricing intelligence of ChemAnalyst, the prices of Calcium Hydroxide might witness a downtrend in European markets. Market players are cautious that the winter season is likely to weigh upon the demand dynamics of Calcium Hydroxide, resulting in fewer transactions from the downstream market. However, following increased attacks by the Iran-backed Houthis, the world's largest shipping companies are avoiding the Red Sea and Suez Canal. This avoidance is expected to cause shipping delays, subsequently impacting container ports across Europe and leading to an increase in transportation costs.