US GGBFS Prices Hold Steady Trend Amidst Stable Construction Industry Performance

Prices of GGBFS (Ground Granulated Blast Furnace Slag) have remained stable in the US market, with no changes observed in September 2023. Presently, increasing prices of Natural Gas, which appreciated by almost 2% in September 2023 and is primarily used as a fuel for blast furnaces for the fabrication of GGBFS, had no impacts on the current market situation of GGBFS as increased production costs were counterbalanced by a moderate demand from the construction industry.

This was largely due to the moderate performance of the construction industry throughout the 1st half of September. Demand from the construction industry was largely moderate despite sales of residential houses tumbling in the United States in September as mortgage rates were recorded to be almost 8% for a 30-year fixed term. Demand for GGBFS was largely generated from the maintenance of existing infrastructure and government-funded projects.

Healthy demand for GGBFS was recorded to be from the transportation sector as civil engineers warned ARTBA (American Road and Transportation Builders Association) of structurally deficient bridges and antiquated water infrastructure, which posed significant safety risks. Private investments in the construction sector were largely concentrated in the construction of factories for the manufacture of batteries for the electric vehicle sector of the automotive industries, with NorthVolt, a leading Swedish firm in the battery fabrication industry, commencing the construction of its 15-billion-dollar factory in Quebec, Canada. Input costs in the construction sector continue to rise as the challenges created by labor shortages worsen, further forecasting a negative outlook on the industry and having a detrimental impact on the market for GGBFS. Furthermore, US Civil contractors also anticipate an increment of backlogs in their ongoing projects, which consequently may lead to an oversupplied situation and depreciate the prices of GGBFS.

Prices of GGBFS are expected to remain steady till October due to continued investments by the government in the maintenance of existing infrastructure and projects but may depreciate in November as construction activities are largely halted in the winter season. The demand for GGBFS is likely to remain subdued in the last quarter of 2023 as it is expected to be only supported by government expenditures on existing infrastructure projects, as key market players in the real estate and construction industry continue to file for bankruptcy, which further abates the demand for cement thereby negatively impacting the consumption of GGBFS which finds its prime application as an additive in the cement mixture.