Metakaolin prices witnessed a marginally bullish market situation in the European and Asian markets in October 2023 owing to the disruptions in the supply chain system, which limited the availability of feedstock kaolin clay and government-funded construction programs.

Prices of Metakaolin have increased marginally by 1% in the German market as input costs of residential building materials such as timber, concrete, and metal increased exponentially. The construction industry remained subdued across Germany and the rest of the Eurozone, with building permits declining by 27% in Germany, 25% in France, and 28% in Sweden, further deteriorating the demand for Metakaolin. The housing crisis worsened across Europe, which was also indicated in the United Kingdom, where housebuilding is expected to drop more than 25% this year. Rent prices have also shown a steady inclination as high-interest rates and supply disruptions compelled real estate developers to cut back on the commencement of new projects. In the face of the deteriorating construction industry, suppliers of Metakaolin sought to increase profit margins by cautiously inclining the product's prices. The limited availability of feedstock Kaolin clay due to the closure of mines in the mountainous areas of Lower Saxony and Northern Bavaria due to snowing also played a crucial role in the uptick of the prices of the Metakaolin. Moreover, an anticipated increase in energy costs is likely to increase electricity costs, which consequently can increase the production costs of Metakaolin. Additionally, according to Statistisches Bundesamt, inflation rates are expected to drop to 3.8% in Germany in October.

The Asian market also experienced a similar situation as the real crisis further worsened in China, where major real estate developers continued to file for protection against bankruptcy. Construction activities were largely halted as firms ran out of money to complete existing projects and begin new projects. The price increment of Metakaolin, which witnessed a marginal uptick of 1%, is largely due to supply chain disruption as the availability of feedstock kaolin clay becomes limited due to typhoon In-Fa nears Shanghai, leading to the closure of airports and ports. The demand for Metakaolin from the ceramic industry was also weak, with purchasing activities existing as per requirement. The demand for Metakaolin receded in October after the termination of the Mid-Autumn festival, and purchasing sentiments again declined to restrictive. Additionally, China's PMI again dropped to below 50 in October after marginally increasing in September.

Overall prices of Metakaolin are likely to witness a further uptick in upcoming months as electricity costs increase in Germany due to heightened demand for LNG due to the progressing winter season and in China, the struggle to increase profit margins from the minimal demand amidst the weak economy, which is expected to enter a state of deflation.