US Fly Ash Market Face Challenges Amid Construction Industry Turmoil

In May 2023, the US Fly Ash prices experienced a 2% decline due to various factors affecting the downstream construction industry. The industry faced challenges such as high material costs, inflation, and labor issues, which contributed to a slow start for the month. These difficulties directly impacted the demand for Fly Ash in the country. However, the supply of Fly Ash remained high during this period, as the product import from countries like Canada and Mexico was smooth and cost-effective, further strengthening the supply chain in the USA.

The Biden administration has recently initiated efforts to explore the potential of utilizing Fly Ash, coal waste, and acid mine drainage as sources for rare earth elements. In April, the US government allocated USD 450 million towards advancing clean energy projects on current and former coal mine sites, with a focus on creating new economic opportunities for coal and Fly Ash communities.

Fly Ash is predominantly used in the construction industry for various purposes such as road construction, concrete production, soil stabilization, grouts and mortars, lightweight aggregates, waste stabilization, and embankments and landfills. The challenges faced by the US Fly Ash market and construction industry have broader implications for the US economy, particularly stemming from the regional banking crisis. This crisis has resulted in the collapse of three medium-sized US banks and a shift of deposits towards larger financial institutions. As a result, regional banks, which play a significant role as lenders to the commercial real estate sector, including hotels, were facing financial strain. This situation has compelled developers to postpone projects or explore alternative funding methods.

Inflation has also played a significant role, causing increased prices for construction materials like steel, lumber, concrete, and copper. These price hikes substantially impact construction projects as materials constitute a significant portion of overall project costs. Higher material costs can lead to increased project budgets, resulting in delays or cancellations of construction projects. These factors directly influence the demand for Fly Ash as a cost-effective alternative in construction.

According to ChemAnalyst, the construction sector's recovery and the ongoing demand for Fly Ash can be significantly influenced by multiple factors such as inflation, labor shortage, and high material costs. In the first half of June 2023, the prices of Fly Ash may witness a decline due to reduced demand from the downstream construction sector. However, it is anticipated that the supply of Fly Ash will remain ample in the US market during this period.