Fly Ash Prices Rise in U.S. Amid Supply Disruptions, Drop in Europe and Southeast Asia

In November 2024, global Fly Ash prices are anticipated to rise in the North American market due to disruptions in the freight sector, caused by the lingering effects of the ILA strikes, worsening weather conditions in exporting regions of Asia due to seasonal typhoons, and strained shipping capacity that resulted in blank sailings. In contrast, prices of Fly Ash are expected to decline in both the European and Southeast Asian markets.

This divergence is driven by a phase of destocking across European and Southeast Asian markets, with suppliers liquidating their inventories due to sluggish demand from downstream cement industries. Market participants have expressed a pessimistic outlook for the remainder of the year, with demand conditions for Fly Ash not expected to improve until next year. This has prompted suppliers to clear out existing inventories of Fly Ash, driven by concerns that stockpiles could lose value by the end of the year.

In the U.S., cement production and shipments have continued their downward trajectory. Total shipments of Portland and blended cement, including imports, in the United States for October 2024 were estimated at 9.93 million metric tons (Mt), reflecting an 8.9% decrease compared to October 2023. Shipments for the year through October totaled 68.5 Mt, a 5.8% decline from the same period in 2023. Additionally, masonry cement shipments were estimated at 193,000 metric tons in October 2024, marking a 6.7% decrease from the same month in 2023. Shipments for the year through October totaled 1.51 Mt, down by 6.6% compared to 2023, signaling weak demand for Fly Ash in the downstream cement industry, data from US Cement and Statistics of National Minerals Information Center presented.

Further compounding these conditions, clinker production in the U.S. totaled an estimated 6.52 Mt in October 2024, down 5.1% from the same month in 2023. Year-to-date clinker production through October stood at 46.8 Mt, a 6.4% decrease compared to 2023. These figures further validate the ongoing low demand conditions for Fly Ash in the U.S. cement sector. Despite these low demand conditions, Fly Ash prices are expected to rise due to delays in shipments and the effects of the ILA strike, which caused a significant reduction in port capacity. Market insights indicate that at least 10-17% of the port capacity on the U.S. East Coast was lost as port authorities worked to clear backlogs. Additionally, worsening weather conditions across the South China Sea, including seasonal typhoons at the beginning of the month, further complicated supply chains. Port congestion and strained capacity, due to the upcoming holiday rush, also contributed to delays in Fly Ash shipments. Furthermore, arbitrage opportunities for Fly Ash from the exporting European market remained largely closed during the early weeks of November due to security tensions across the Red Sea, before the declaration of a ceasefire.

In Europe, particularly in Germany, subdued demand from the construction sector has continued to weigh on Fly Ash prices, with the construction industry remaining sluggish. However, Spain has been an outlier in the region for the Fly Ash demand. Cement consumption in Spain increased by 1.3% during the first 10 months of 2024, a slight improvement compared to the 0.5% decline observed at the end of Q3 2024. This growth is largely attributed to a 14.5% rise in cement consumption in October 2024 compared to the same month in the previous year, reaching 1.37 Mt—the highest level since 2019. Despite these domestic gains, cement exports from Spain fell by 1% in October 2024 to 0.41 Mt, contributing to a 13% decline in cumulative exports for the year through October. Since November 2023, exports have decreased by 16%, totaling 0.47 Mt, which has limited the overall positive impact on the Fly Ash market.

In China, Fly Ash demand remained moderately low throughout November 2024. Early in the month, the announcement of economic stimulus packages led to some improvement in sentiment regarding Fly Ash procurement, but this uptick was largely based on sentiment rather than actual market performance. As a result, the market continued to underperform, and this trend may have contributed to a bearish outlook for Fly Ash by the end of the month. According to the National Bureau of Statistics, cement output in China from January to September 2024 totaled 1.327 billion tons, a year-on-year decrease of 10.7%, with the same 10.7% decline observed in both the January-August and January-September periods. In September, monthly cement output was 168 million tons, marking a 10.3% year-on-year decrease. This decline in cement production further reflects the weak demand for Fly Ash in the Chinese market.

However, Fly Ash production in China has shown some improvements. As winter approaches, daily consumption of coal in certain regions has increased slightly, leading to an uptick in production of the product. This is further anticipated to create an oversupply condition across the market, which could exacerbate the current oversupply conditions in the region.

Overall, the global Fly Ash market is expected to experience mixed trends, with price appreciation in North America and depreciation in Europe and Southeast Asia, as a result of various supply and demand factors, including destocking, economic conditions, and geopolitical tensions.