Soaring Energy prices have started bothering the European construction sector in the past few months. As per previous intel, construction chemicals have been rising on the back of high input costs coupled with soaring natural gas prices in the regional market. As per the ChemAnalyst data, major raw material for ceramic industry “Potassium Carbonate” prices has started tracing an uptrend since January, and an increment of around 12% has been observed in the past couple months in the German market.

The ongoing crisis between Russia and Ukraine has constrained supply activities across the black sea and threatened future supplies of natural gas across the region. Natural gas is a major source of energy for European manufacturers, while Germany primarily imports it from Russia. Thus, supply constraints from Russia may lead to another energy crisis in Germany, which is a prime concern for domestic manufacturers. In addition, demand fundamentals for the product from the domestic construction sector are firm in the meantime, while construction chemicals are getting expensive week over week in the regional market. Furthermore, another reason behind this steep price escalation was labour shortage, and several European countries have been witnessing a shortage of skilled labour, affecting the adequate supply of construction materials in the market.

As per ChemAnalyst, most of the construction chemicals are likely to gain further value in forthcoming months on the back of rising input costs due to supply constraints. However, despite the fact that crude oil value has started showing a decline on a daily contract basis, natural gas is unlikely to ease anytime soon in the country. Furthermore, Germany is one the largest exporter of Potassium Carbonate, thus rising production costs and supply constraints from the black sea will eventually affect the pricing dynamics of the product across the international market.