Sodium Sulphate pricing has shown a stabilizing trend over the past two months, with a gradual hint of price decline globally. The prices showed a rising trend since the invasion of Ukraine as the supply chains got disrupted, making input costs excruciatingly high for Europe. In 2023, the prices continued to rise till April 2023, while the energy prices decreased due to supply-side disruption and inflationary pressures destocked in the market. This was visibly observed in the price rise from December 2022 to April 2023.

Sodium Sulphate is an important intermediate in soaps and detergent industries. Over 60% of the volume of Sodium Sulphate obtained is used in processing soap and detergents, and 12-13% of the volume is used to manufacture glass. Market players seldom use the pricing of Sodium Sulphate to check the health of consumer sentiment in the general economy.

Market participants have revealed that inflationary and recessionary pressures in Europe have caused two primary consequences- the first includes a decline in consumer sentiments across Europe, and the second includes a rise in unemployment. Price volatility in Sodium Sulphate is mainly attributed to the change in demand from the end-use consumer goods. The European construction industry overall is showing a declining trend while there is a rise in refurbishing and retrofitting energy transitive and climate-friendly technologies in existing real estate stocks. This trend in consumer awareness is seen in the automobile sector. Recent data on new Passenger Vehicle (PV) registrations in Germany reveal a positive growth in EV and energy transition automobile sales. Market participants have revealed that the demand from the automobile and construction sectors is causing a cost-push across the Sodium Sulphate value chain and is one of the primary reasons responsible for the inflated prices of Sodium Sulphate in Europe.

Another factor that is responsible for causing variability in the pricing of Sodium Sulphate and the value chain is unemployment. One German supplier of Sodium Sulphate has asserted that any change in the employment profile in a region directly affects the demand for detergents and soaps across the region. The Market participants revealed that unemployment across the region also affects Sodium Sulphate’s value chain, apparel, and textile performance. Economists argue that unemployment leads to a visible decline in detergent demand due to clothing standards employed by the companies. Consumer sentiments, on the other hand, reflect the movement of retail FMCG performance. Consumer confidence in Germany is expected to decline primarily due to interest rate hikes, recessionary pressure, and long recovery expectations.

Market participants forecast a rise in prices from the month of November 2023 as energy pricing across Europe is expected to rise, pushing costs across the Sodium Sulphate value chain. The destocking of costlier orders is expected to take longer and well into H1 2024. American markets are expected to recover faster than European markets primarily due to the energy dependence of Europe on LNG and Natural Gas. US Federal Reserve official, in a public statement, has asserted “faster economic recovery” on the grounds of lower inflation and high investment expenditure incurred currently. Inflations Reductions Act 2022 is pushing energy transition and investment in cleaner energy technologies, which is expected to provide the necessary demand and recovery push by the beginning of Q4 2023.