Tepid Construction Demand Pressures the Market Growth of Calcium Hydroxide in Q2 2024

Hamburg, Germany: In the second quarter of 2024, the prices of Calcium Hydroxide have demonstrated a mixed trend across the European market. In early Q2, the deterioration in construction activities coupled with persistent inflationary pressure in Europe had a detrimental effect on Calcium Hydroxide prices. This decline in prices has put pressure on manufacturers and suppliers, impacting their profitability. The sluggish recovery in the construction sector is a primary factor driving the downward trend in Calcium Hydroxide prices throughout the European market. However, towards the quarter's end, the constrained production activities have weighed on market sentiments, leading to a rise in Calcium Hydroxide prices.

The ChemAnalyst database has shown that the prices of Calcium Hydroxide have demonstrated an increment of USD 5 per ton in June compared to the prices observed in the previous month. On the upstream front, despite increased cost support from Calcium Oxide, the Calcium Hydroxide market has remained stagnant as the market was dominated by average demand from the downstream Construction and Paper industries. Germany's construction sector continued to experience significant contraction in May, resulting in weak market offtakes along with plunge in new orders. All three major construction categories saw ongoing declines. Although housing activity remained the most negatively affected sector, the rate of decline in housing activity was the slowest it had been in eight months.

On the other hand, this month, Calcium Hydroxide prices have remained low in China's domestic market due to moderate construction activity and weak demand from the Paper industry downstream. Consequently, Calcium Hydroxide prices have been steadily decreasing. Downstream manufacturers have been cautious about restocking on a large scale because demand from the construction sector has not significantly improved. Domestic procurement has been average, and there have been no major changes in overseas demand. After the holiday season, there have been few new domestic orders, with suppliers prioritizing fulfilling existing orders and maintaining minimal inventory levels. Thermal coal production and sales have been normal, ensuring stable coal supply across production areas.

According to ChemAnalyst, Calcium Hydroxide prices are forecasted to see a modest uptick in the European market. This increase is expected as production activities are scheduled to pause during the holiday season in August, resulting in constrained availability of finished goods. Despite these supply-side adjustments, the demand fundamentals for Calcium Hydroxide remain subdued across the region. The ongoing sluggishness in demand, particularly from the construction sector where Calcium Hydroxide is vital for applications like cement and mortar, continues to exert downward pressure on prices.