Sodium Lignosulphonate Prices Stable in Asia and U.S. in Early October, Driven by Low Production Costs

Sodium Lignosulphonate prices remained stable across both the Asian and U.S. markets in early half of October 2024. This stability in Sodium Lignosulphonate pricing is primarily attributed to low production costs in both regions.

In the U.S., Sodium Lignosulphonate prices held steady after experiencing a 1.5% increase in the late September. A significant factor contributing to this price stability was the decline in production costs, mainly driven by lower raw material prices, such as wood pulp. Despite a positive demand outlook for Sodium Lignosulphonate in the U.S., particularly in the construction sector, prices remained unchanged.

The construction industry played a key role in supporting Sodium Lignosulphonate demand during this period. Consumer sentiment improved following the Federal Reserve's decision to cut interest rates, which led to lower mortgage rates. As a result, home sellers listed 11.6% more properties in September compared to the same period the previous year. Additionally, the U.S. construction sector added 25,000 jobs in September, with both residential and non-residential contractors expanding their workforce. This growth in construction activity maintained a steady demand for Sodium Lignosulphonate in the U.S. market.

In the Asia-Pacific (APAC) market, particularly in China, Sodium Lignosulphonate prices also remained unchanged in early October 2024. This followed a 1.6% price surge in late September. The price stability in China was primarily due to low production costs, as wood pulp prices remained subdued during the holiday season. Ample inventory availability further contributed to the steady pricing of Sodium Lignosulphonate in the region.

However, the construction sector in China experienced a downturn, which impacted the consumption of Sodium Lignosulphonate. This decline can be traced back to the government's 2020 crackdown on excessive debt among developers, leading to a slump in the real estate sector. Reduced property sales, falling home prices, and declining local government revenues have all contributed to a slowdown in construction activity. Although the government has implemented policies such as mortgage rate cuts and efforts to stimulate housing loans, the construction sector remains sluggish as the market focuses on long-term structural reforms rather than short-term growth. In September, new-home sales from the top 100 real estate companies dropped by 37.7% year-on-year, a sharp increase from the previous month's 26.8% decline.

Despite these challenges, the supply and demand for Sodium Lignosulphonate in China remained balanced, preventing any significant price fluctuations. However, Sodium Lignosulphonate prices are expected to remain stable in the Asian market in the coming weeks, with the expectation of the higher inventory for the wood pulp. While the US market may experience a potential rise, driven by the improved consumption levels.