Rise in buying activities from downstream enterprises elevated US Fumed Silica in Jan 2024

The price of Fumed Silica in the USA has finally taken a turn upward in Jan 2024 after two months of decline, driven by a potent mix of factors. January 2024 witnessed a surge in demand from the downstream construction sector, coinciding with supply disruptions caused by extreme weather conditions. This perfect storm has pushed prices higher, impacting various industries that rely on this versatile material.

After witnessing straight two months of contraction, the Fumed Silica market in the USA finally recovered during January 2024 on the back of high demand from the downstream construction sector to settle at USD 6091/MT Fumed Silica FOB New York with a hike of 1.9% during this timeframe. The construction sector in the USA experienced a welcome rebound in January, with the number of employees increasing from 8,126,000 to 8,136,000 in January 2024. This growth reflects heightened consumer engagement and spending in the New Year, leading to increased demand for construction materials. As a vital component in many construction products, Fumed Silica benefited from this upswing. Its unique properties enhance strength, durability, and flowability in numerous applications, making it highly sought-after in the booming sector.

Moreover, supply chain disruptions have also played a major role in the Fumed Silica market. The Arctic Blast of January brought havoc to the USA, causing extreme cold temperatures and widespread disruptions across industries. One major consequence was the temporary closure of the Port of Houston, a critical hub for shipping every other commodity including Fumed Silica. This closure created a backlog in deliveries, impacting the timely availability of Fumed Silica. Additionally, disruptions in shipping routes like the Panama Canal and the Red Sea further squeezed supply, leading to higher freight costs. A ripple effect of increased demand and limited supply pushed Fumed Silica prices upwards. The scarcity created by supply disruptions coincided with the heightened demand from construction, fueling a significant price hike in the Fumed Silica market during this timeframe. Furthermore, rising transportation costs due to the disruptions compounded the price increase. The US Manufacturing Purchasing Managers' Index (PMI) also pointed towards cost inflation reaching a nine-month high, further supporting the upward trend during January. A slower rate of output contraction and a return to growth in new orders helped to support overall growth.

As per ChemAnalyst, the Fumed Silica market in the USA is expected to grow further on the back of upcoming new projects lined in the downstream construction category. Continued fluctuations in demand and potential further disruptions due to weather events or geopolitical changes could impact prices.