US Calcium Carbide: Prices Slide on Lower Production Costs, Softened Demand

In March 2024, the US Calcium Carbide market witnessed a significant downturn, diverging from the consistent price increases seen in recent months. This decline was primarily triggered by a slight decrease in construction spending, which resulted in reduced demand for downstream PVC, steel, and related industries. Consequently, this diminished demand exerted downward pressure on Calcium Carbide prices. Moreover, the reduction in production costs, attributed to lower feedstock coke and natural gas prices, further contributed to the decline in Calcium Carbide prices.

According to data released by the US Census Bureau, construction spending unexpectedly contracted by 0.3% in February, indicating challenges within the sector. Weaknesses particularly manifested in nonresidential and public projects, countering the positive momentum observed in single-family homebuilding. Private construction projects showed stability for the second consecutive month, with residential construction seeing a modest increase. Conversely, investment in private non-residential structures, including factories, witnessed a notable decline of 0.9%. Additionally, the reduction in US steel imports by 3.2% month-on-month in February 2024 further highlighted subdued demand for steel products.

Moreover, the dynamics of the natural gas market also played a pivotal role in influencing Calcium Carbide prices during the period. Between January and February, natural gas prices experienced a significant decline attributed to the unusually warm winter weather, which reduced the demand for natural gas for electricity and space heating. This decline in natural gas prices reduced the production costs of Calcium Carbide, contributing to the observed price dip. In addition, the reduction in feedstock coke prices further compounded the decline in Calcium Carbide prices. Lower feedstock coke prices translated into reduced production costs for manufacturers, providing them with an opportunity to adjust their pricing strategies in response to market conditions. As of March 2024, the assessed price for Calcium Carbide stood at USD 1415/MT, FOB USGC, reflecting a 2.8% decline compared to the previous month. Despite the recent decline, industry experts remain cautiously optimistic about the future trajectory of Calcium Carbide prices. As construction activities are projected to stabilize and natural gas market dynamics potentially shift, there is anticipation for a rebound in demand for Calcium Carbide, which could subsequently lead to an uptick in prices.

As per ChemAnalyst, the price of Calcium Carbide is anticipated to increase in the domestic market of the US. This projection is bolstered by the US government's efforts to support the construction sector, suggesting a positive outlook for Calcium Carbide prices in the foreseeable future. The expected rise in Calcium Carbide prices reflects a growing demand for the compound in various industries, including construction, steel manufacturing, and chemical production.