Global Boron Prices Shift Southwards Amidst Decline in Oil Extraction Rate

In the last week of September 2023, global Boron prices plummeted due to decreased demand from the oil and gas industries. This drop resulted from lower consumption rates, driven by bans on oil exports in Middle Eastern and OPEC countries until the end of 2024. Additionally, Russian oil companies banned diesel exports to all but four former Soviet states (Belarus, Kazakhstan, Armenia, and Kyrgyzstan), further impacting Boron demand. The downstream paint and coating industries also saw reduced Boron demand due to sluggish activity in the auto and construction sectors. Overall, Boron prices dipped due to weakened demand in multiple sectors throughout the globe.

The demand for Boron in the United States dampens as the US faces a concerning downturn in its oil and gas supply as extraction rates decline, sparking worries about energy availability and costs. American energy companies have just announced a reduction in operational oil and natural gas rigs, the first such drop in three weeks. Moreover, key shale-producing regions are expected to see a third consecutive monthly decrease in oil output in October, reaching its lowest point since May. This production decline raises concerns about potential sluggish demand for Boron and the oil price spikes, with experts warning prices could reach $150 per barrel without government intervention. To tackle the global oil supply shortage, the US government plans to boost oil and gas extraction efforts in Texas, aiming to stabilize the energy market and secure a reliable supply.

Meanwhile, Russia, a major petroleum and crude oil producer, has imposed an indefinite ban on the export of diesel and gasoline to most countries. While intended to stabilize domestic fuel prices, this decision poses a significant risk of disrupting fuel supplies as winter approaches, potentially exacerbating global shortages. This announcement by the Russian Government has shortened the demand for Boron across the European spot market. Notably, Russia's ban excludes certain countries, including Belarus, Kazakhstan, Armenia, and Kyrgyzstan, which are members of the Eurasian Economic Union. Despite these developments, Russia has managed to evade G7 sanctions on most of its oil exports, shifting trade flows and boosting its revenues as crude oil prices approach $100 a barrel. These factors have reduced the consumption rate of Boron in the Russian domestic region.

According to ChemAnalyst, the price of Boron is expected to maintain a lower level as the consumption rate looks blurred from the oil and gas extraction industries until government policies boost the production rate. The declining supply of crude oil in the global market would show pessimistic effects on the Boron consumption rate and prices throughout the globe. These criteria would create a negative market sentiment for Boron trading and would incite the mills to lower their prices for Boron to attract customers from local and overseas markets.