For the Quarter Ending September 2024
North America
The North American Metakaolin market experienced a predominantly bullish trend in the third quarter of 2024, driven by production losses attributed to the ongoing hurricane season. This led to moderate availability of Kaolin clay, significantly impacting Metakaolin production as electricity prices rose throughout the quarter, according to the US Energy Information Administration (EIA), further increasing production costs. Hurricane-related outages contributed to low Metakaolin production levels in the US market. However, demand conditions from the cement and commercial construction sectors remained unfavorable.
High mortgage rates at the beginning of the quarter dampened the pool of prospective homebuyers, exerting downward pressure on demand for Metakaolin. Additionally, as the quarter progressed, uncertainties related to the upcoming election season caused apprehension among the local populace, resulting in reduced spending in the construction sector. This uncertainty further constrained procurement activities for Metakaolin, adding to the challenges faced in the market.
Overall, while price trends remained upward, external factors such as weather disruptions and economic uncertainties significantly influenced market dynamics.
APAC
The third quarter of 2024 in the APAC region experienced a significant increase in Metakaolin prices, influenced by various factors. Challenging weather conditions in North China reduced mining activities and limited the availability of Kaolin, a crucial feedstock for Metakaolin production. This scarcity, coupled with subdued demand from the downstream cement industry, created supply constraints that pushed prices upward. The impact of Typhoon Yagi further exacerbated production losses in the chemical industry. China saw the most substantial price changes, with prices surging by 10% due to flooding in East China and ongoing liquidity issues in the construction sector. Demand from the primary cement industry remained negative, as China's Construction PMI dropped from 51.2 in July to 50.6 in August 2024. Cement output also declined, falling from 16,397 tons in June to 15,368 tons in July, with further declines expected in August. The China Cement Association (CCA) noted a "continuous decline in demand" and reported that four of the six major cement companies experienced revenue drops, leading to an estimated loss of about $140 million in the first half of the year. Cement output decreased by 13%, from 980 million tons in the first half of 2023 to 855 million tons in the same period in 2024. Overall, pricing trends in the region demonstrated seasonality, with a 5% increase from the previous quarter. Prices rose by 2% when comparing the first and second halves of the quarter, reflecting tightening market conditions. Despite disruptions such as plant shutdowns, the quarter concluded with Metakaolin priced at USD 41/MT FOB Shanghai, highlighting a consistently positive pricing environment driven by supply constraints and robust dynamics.
Europe
The third quarter of 2024 in the European Metakaolin market saw a notable uptrend in prices, driven by constrained supply due to low production activities and adverse weather conditions. Declining mining activities further exacerbated the demand-supply imbalance, while logistics challenges, particularly in transportation, also contributed to rising prices. In Germany, cement production fell by 9.6% to 13.810 million tons, down from 15.271 million tons last year and 17.767 million tons the year before, signaling low demand conditions. The construction sector faced a steep downturn, particularly in the housing market, which negatively impacted demand for Metakaolin from the paints and solvent industries. Although civil engineering showed some resilience, activity in the construction sector overall fell at an accelerated pace, with commercial building projects experiencing their fastest rate of decline since early in the year. Price pressures in construction eased, with purchasing costs and subcontractor rates falling for five consecutive months. Germany experienced a 5% increase in Metakaolin prices, ending the quarter at USD 110/MT FOB Hamburg. This reflects the strong correlation between low production activities and price hikes, underscoring a consistent upward pricing trend throughout the quarter.
For the Quarter Ending June 2024
North America
The second quarter of 2024 has stabilized in the Metakaolin market in North America, marked by a mixed trend in prices during this quarter. The decline in Metakaolin prices in May 2024 has been influenced by several significant factors, primarily the reduction in crude oil costs, ease in the Kaolin clay prices, and oversupply conditions. The depreciation in the prices of upstream has notably eased production costs, contributing to lower Metakaolin prices. Furthermore, an oversupplied market condition, driven by excess inventories and high stockpiles of Metakaolin, exacerbated the price decline.
Turning to June 2024, the end of the second quarter witnessed prices of Metakaolin increase due to heightened production costs and cautious operations across the US Gulf Coast and Louisiana despite demand conditions being largely unfavorable from the downstream construction market. The increment in the prices is further attributed to lengthened delivery times and higher transportation costs which further pushed the prices of Metakaolin to the higher end. Higher mortgage rates are expected to further cast a negative sentiment for the transactions in the downstream construction industry keeping overall demand conditions moderate. The procurement activities from the industrial application remained positive for the time being.
The correlation between reduced upstream prices and slow downstream demand was evidence of stability in the Metakaolin prices. Disruptions such as issues with maritime transportation and highway insecurity further complicated the supply chain, adding to the tightening of supplies in the US Metakaolin market.
APAC
During Q2 2024, the pricing environment for Metakaolin in the APAC region exhibited a marked upswing. Several critical factors contributed to this trend, notably the heightened demand from the construction and cement sectors, spurred by favorable economic conditions and ongoing infrastructure projects. The onset of peak construction season further bolstered the demand, while adverse weather conditions and logistical challenges intermittently constrained supply, magnifying upward price pressures. An essential aspect was the limited availability of raw materials, such as Kaolin clay, due to mining difficulties and transportation disruptions, thus exacerbating the supply-demand imbalance. Focusing on China, where the most significant price fluctuations were observed, the market dynamics were particularly pronounced. The quarter demonstrated a clear seasonal pattern, with prices steadily climbing in response to consistent demand from downstream industries and constrained supply chains. Overall, the price trend in China correlated strongly with supply-side constraints and robust demand, leading to a positive price sentiment throughout the quarter. The price environment, therefore, remained decidedly bullish, culminating in a quarter-ending price of USD 41/MT of Metakaolin (MK0) FOB Shanghai. The consistent increase in prices underscored the resilience and strength of the underlying market factors driving the Metakaolin market in the APAC region during this period.
Europe
The second quarter of 2024 has been characterized by a pronounced decline in Metakaolin (MK50) pricing across the Europe region, driven primarily by adverse market dynamics and external disruptions. The ongoing challenges within the construction sector, compounded by persistent weather-related issues, have significantly dampened demand for Metakaolin. Flood-induced logistical disruptions and elevated transportation costs further exacerbated market conditions. Industrial production faced setbacks due to both reduced output and lower new order volumes, reflecting a cautious sentiment among manufacturers. The inflationary backdrop, albeit slightly improved, did little to spur demand within the key downstream industries, including cement and ceramics. Focusing on Germany, the epicenter of price volatility, the market saw a marked downturn amidst a backdrop of constrained demand and supply chain inefficiencies. The German construction sector’s persistent underperformance, underscored by declining building permits and new orders, contributed significantly to the negative pricing environment. Seasonally adjusted factors, such as flooding and subsequent repair delays, further strained the market. The overall trend suggests a steady decline, with a notable correlation between adverse weather conditions and logistical challenges. The sum of these factors culminated in the latest quarter-ending price of USD 107/MT for Metakaolin (MK0) FOB Hamburg in Germany. This quarter’s pricing environment has been decidedly negative, reflecting the compounded impact of supply chain disruptions, weak demand, and seasonal challenges. The outlook remains cautious as the market continues to navigate these persistent headwinds.
For the Quarter Ending March 2024
North America
The North American Metakaolin market continued to be driven by high demand with prices continuing to increase. The demand from the cement sector was recorded to have been strong as mortgage rates neared stabilization and the spring home buying season approached.
A well-performing sector was indicated by the completion of housing projects and the perennial shortage of second-hand houses. House sales continued to expand throughout the first quarter including outlays and commercial activities. On the other side, overall housing inventory continued to diminish with realtors being more active, particularly in February and March 2024. This all led to a high consumption of cement consequently leading to increments.
Moreover, commercial activities also continued to expand as indicated by the increased number of renovations across the major US hotel players. However, at the beginning of the year here construction sector usually witnesses moderation in the US, and challenging weather conditions continued to drive the US Metakaolin market as limitations in transportation and logistics continued to prevail increasing the lead times for deliveries.
Asia
The first quarter of 2024 witnessed prices of Metakaolin increase by approximately 2% across the Asian market despite the construction continuing to underperform. The Asian Metakaolin market was primarily driven by the limited availability of feedstock Kaolin Clay due to challenging weather conditions across North China. This consequently led to limited mining activities and limited the availability of Kaolin Clay, which consequently led to moderate production of Metakaolin. The only support to the Asian Metakaolin market was provided from the demand side, due to healthy transactions in the downstream ceramic industry owing to the Chinese Lunar New Year festive season. However, the demand from the downstream cement sector continued to remain low as cement production and cement exports from China continued to decline throughout the first quarter of 2024. With weather conditions remaining mostly challenging, construction activities across China failed to gather substantial momentum. Moreover, after the termination of the festive Chinese Lunar New Year, the demand from the downstream ceramic industry also faded as post-festive dullness prevailed, thereby reliving any support from the demand side.
Europe
The European Metakaolin market witnessed an appreciation of approximately 1% during the first quarter of 2024. The European Metakaolin market was largely driven by challenging conditions across the supply chain system stemming from strikes from Union workers regarding low wages. This led to limited functionality in railways and trucking activities, which consequently led to increments in lead time for deliveries. The demand for the product remained moderate across the Eurozone and mainly existed from the Dutch, Belgian, and British markets where construction activities improved. However, across the domestic German market, demand conditions continued to remain unfavorable as the construction sector continued to remain in retrenchment for the fifteenth consecutive month. All segments of the construction sector namely, residential construction, commercial construction, and civil engineering witnessed significant contraction towards the end of March 2024. Residential permits continued to decline with real estate continuing to exhibit a pessimistic outlook for the year ahead and investment sentiments continued to remain in the negative territory.
For the Quarter Ending December 2023
North America
The market situation of Metakaolin witnessed a bullish situation across the North American market during first half of fourth quarter of 2023 as input costs in the construction Sector in the United States witnessed a sharp increment.
Mortgage rates touched approximately 8% for a 30-year fixed term and 7% for a 15-year fixed term, according to Federal Home Loan Mortgage Corporation (Freddie Mac), leading to a subdued demand from the housing industry. The bullish trend was mainly attributed to well performing construction sector across the importing Mexican market, as nearshoring activities continued. Government funded construction activities were recorded to a healthy including the construction of a new airport and railway station and major automotive industries setting up manufacturing bases across Mexico. This consequently kept the prices of Metakaolin across the United States largely afloat.
US manufacturing activities also recorded a softer downturn in December which also disturbed the balance between demand and supply, keeping the market situation largely bullish. The secondary demand from importing Canadian market was also recorded to be low. Amidst the overall moderate demand during December 2023, weather conditions in the United States deteriorated, leading challenging conditions in transportation and logistics, further increasing lead times.
APAC
Metakaolin pricing in the APAC region witnessed a bullish market situation throughout the fourth quarter of 2023 mostly attributed to limited availability of feedstock kaolin clay. Firstly, the market experienced moderate supply levels due to limited mining activities caused by adverse weather conditions, particularly heavy rain, and snow in certain regions. This led to a decrease in the availability of the feedstock kaolin clay, impacting the overall supply of Metakaolin. Secondly, demand for Metakaolin remained moderate, primarily driven by the downstream ceramic industry. The festive season, such as the Mid-Autumn festival, boosted purchasing activities in this sector. However, demand from the construction industry was weak, as major developer firms across the APAC region faced financial difficulties and postponed acquisition of raw materials. Prices increased by approximately 5.2% in November 2023, driven by supply disruptions caused by bad weather and limited mining activities amidst a moderate demand from government funded activities and importing Southeast Asian market. However, prices plummeted by approximately 6% in December 2023 as the importing Southeast Asian market entered a post-festive season and experiences destocking activities driven by depreciating energy costs which deflated factory gate charges. In terms of price trends and seasonality, the price of Metakaolin in APAC region during the fourth quarter of 2023 remained relatively stable compared to the same quarter of the previous year. There was no significant change in the price percentage from the previous quarter. Additionally, the price comparison between the first and second half of the quarter showed a slight decrease of 3%. Overall, the Metakaolin market in the APAC region during the fourth quarter of 2023 was influenced by limited supply due to adverse weather conditions and moderate demand from the downstream ceramic industry. The price of Metakaolin in China at the end of the quarter was USD 36/MT FOB Shanghai.
Europe
In the fourth quarter of 2023, the Metakaolin market in Europe experienced some notable developments. Firstly, the limited availability of kaolin clay due to the closure of mines caused by heavy rains in Southern Germany impacted the supply of Metakaolin. This scarcity led to a slight increase in prices as manufacturers aimed to improve profit margins amidst recessionary conditions. Secondly, demand from the downstream construction sector remained subdued, with slow growth in overall industrial production and the ceramic industry. However, there was moderate demand from ongoing construction projects and government-funded initiatives. Lastly, the housing crisis in Europe, particularly in Germany, led to increased input costs, which further contributed to the upward trend in prices. During this quarter, there were no reported plant shutdowns in the Metakaolin market. In Germany, the largest market in the region, the price of Metakaolin increased by 2% in October. This was primarily due to the rising prices of LNG, which raised production costs and electricity charges. Additionally, demand from the construction sector remained moderate, supported by government-funded programs and the need for infrastructure refurbishment. The price of Metakaolin (MK0) FOB Hamburg in Germany for the fourth quarter of 2023 is USD 106/MT.
For the Quarter Ending September 2023
North America
Prices of Metakaolin have witnessed a marginally bearish trend in North America as construction activities largely came to a halt due to increased mortgage rates, which were recorded to be approximately 8% in the third quarter of 2023. Moderate demand for the product from the repairment of existing roadways and bridges kept the depreciation of prices to a marginal level. The repairments in the existing water infrastructure and roadways, which commenced after the issuance of the warning by civil engineers of ARTBA, helped in the moderate consumption of the product. This consumption rate proved to be insufficient to improve the market situation for the prices of Metakaolin. Demand from the downstream construction also moderately improved as backlogs shrank, but increased interest rates have largely led to high electricity prices and factory gate charges, which increased input costs. With demand and consumption rates being largely low, existing inventories had to be handed out at discounted rates, which further compelled suppliers to reduce profit margins.
APAC
Prices of Metakaolin have increased by almost 5% in the Asian market as despite the construction industry across Southeast Asia being largely subdued. This was largely due to incessant flooding caused by severe disruptions in the supply chain system. Moreover, landslides caused by severe rains in the mountainous regions of East Asia continued to cause limited availability of kaolin. The bad weather throughout the first half of the quarter caused massive disruptions in the supply chain system with large parts of the region being underwater and large cities facing blackouts. In September, however, demand from the downstream ceramic industry improved as the Mid-Autumn festival improved purchasing sentiments across the region which compelled purchasing activities to take place. Towards the end of the third quarter of 2023, however purchasing sentiments retreated to being restrictive. Moreover, the construction industry across East Asia is likely to remain subdued as the winter season approaches. International offtakes from the prime East and Southeast Asian markets were also not high.
Europe
Prices of Metakaolin experienced a largely bullish situation in the European market, with prices of the product inclining by almost 4% throughout the third quarter of 2023. Demand from the downstream construction industry was mostly sluggish, with minimal demand originating from the maintenance of existing infrastructures and towards the improvement in the supply chain system, which was mostly transportation. Ongoing construction activities were largely limited to the refurbishment of existing offices and houses as residential permits declined. Increasing commercial activities largely led to the construction of new logistic centers and warehouses, which was also limited. Input costs such as electricity costs, increased as problems in the existing supply chain system resurfaced. Moreover, it was also observed that government expenditures in for hospitals and schools have taken hold which may also marginally have strengthened the demand for the product. However, the main reason for the appreciation in the prices was largely attributed to suppliers trying to improve their profit margins amidst prevailing recessionary conditions.
For the Quarter Ending June 2023
North America
During the second quarter of 2023, the Metakaolin market in the United States witnessed a decline in prices. This decrease was primarily attributed to a drop in demand from downstream construction industries, which were grappling with a shortage of labour and the US bank crises following the failure of Silvergate Bank, Signature Bank, and Silicon Valley Bank (SVB). This situation disrupted the availability of financing and lending options for construction projects. Construction companies typically rely on banks and financial institutions to secure loans and credit lines for funding their projects. With SVB's failure, there was a reduction in available credit and stricter lending standards, making it challenging for the construction industry to obtain the necessary capital for their projects. As a result, there was a potential for delays or cancellations in the demand for construction products. The decrease in demand for construction products directly impacted the prices of Metakaolin. In April 2023, the product prices remained stable primarily due to a balanced gap between demand and supply. However, in May and June, the value of Metakaolin experienced respective declines of approximately 2% and 1%. During the final two months of Q2 2023, the Bearish Market situation was primarily influenced by the smooth and cost-effective importation of Metakaolin from overseas. These imports further influenced the prevailing price trends.
APAC
The second quarter of 2023 witnessed a bearish sentiment in the Asian market for Metakaolin, with significant fluctuations in its price. In China, the price of Metakaolin experienced a decline, with decreases of approximately 7.9% and 2.9% in May and June, respectively. This decline in price was reflective of the overall decrease in the national average price of Metakaolin during this period. The market demand performance was not satisfactory, resulting in increased pressure on manufacturers' inventory. Additionally, the continuous decline in raw material prices contributed to a decrease in production costs, intensifying the pressure on manufacturers to stabilize prices. Consequently, the market maintained a downward trend. The main factor influencing the market conditions during this period was the prevalent rainy weather, which led to a decline in the operating rate of construction sites. As a result, market demand for Metakaolin experienced a decline, exacerbating manufacturers' inventory pressure and further driving down prices. However, in April 2023, the price of Metakaolin witnessed an increase of approximately 5.6% due to an improvement in demand from the construction sector. Similarly, in the Indian market, the price of Metakaolin experienced a decline of around 5.6% and 3% during the last two months of the second quarter. The decrease in price was attributed to a fall in market demand for Metakaolin during this period, along with unfavourable export conditions for manufacturers. The price drop of cement and other building materials further impacted manufacturers' confidence, resulting in increased inventory pressure. In an effort to alleviate this pressure, manufacturers sold the product at a cheaper rate. However, there was a slight increase in the product price by approximately 2% during the first month of the quarter in the Indian market. This increase was driven by improved demand from the domestic market, primarily due to the government's focus on the construction and infrastructure sector, leading to increased demand for construction goods. Overall, the second quarter of 2023 experienced a bearish sentiment in the Asian market for Metakaolin, with fluctuating prices influenced by market demand, raw material costs, and external factors such as weather conditions. Manufacturers faced challenges in stabilizing prices and managing inventory, but certain periods saw improvements in demand, particularly in response to government initiatives in the construction sector.
Europe
In the second quarter of 2023, the European Metakaolin market witnessed a downturn as product prices experienced a decline. Specifically in Germany, the prices of Metakaolin decreased by approximately -2%, 2%, and 4% in April, May, and June 2023, respectively. According to initial estimates from Eurostat, the statistical office of the European Union, seasonally adjusted production in the construction sector decreased by 0.4% in both the euro area and the EU when comparing April 2023 to March 2023. The primary reason for the pricing dynamics in the second quarter of 2023 was the low demand from the downstream construction industry. Additionally, macroeconomic factors such as high inflation negatively impacted consumer spending, further contributing to the market's bearish sentiment. The buying momentum from derivative sectors, particularly construction and consumer goods, significantly weakened as buyers prioritized maintaining minimal inventories and acquiring materials only when necessary. The strike by dock workers at the Port of Hamburg, Germany, which is the nation's busiest and the second busiest in Europe, also played a role in the decline of Metakaolin prices. This strike had an impact on the export of Metakaolin, as Europe mainly exports it to the USA.
For the Quarter Ending March 2023
North America
During the initial two months of the first quarter of 2023, there was an increase in the price of Metakaolin. The primary reason for this price increase was the strong demand for the product from countries overseas, including France, Germany, and the UK. Meanwhile, the demand from the downstream construction industry remained stable during this period. However, in the third month of the quarter, the prices of Metakaolin experienced a decrease in the US market. This decline was attributed to the abundant availability of the product in the international market and the lower demand from the downstream construction industry. The construction industry in the region had a moderate performance during the first quarter of 2023 and was primarily affected by labor shortages and crises in US banks.
APAC
During the first quarter of 2023, the Asian Metakaolin market experienced mixed sentiment. In India, the price of the product saw a decline of approximately 9%, 6.5%, and 1.5% in January, February, and March 2023, respectively. This decrease in prices was primarily driven by the ample availability of the product coupled with lower demand in the Indian market. In contrast, China witnessed an increase in the price of Metakaolin during this period. The price rose by around 6% in January and 3% in March, while it remained stable in February. The demand for Metakaolin from overseas markets, particularly Southeast Asian countries, experienced growth as China, being a significant player in the global Metakaolin market, supplied Metakaolin to various countries, contributing to the increased demand from overseas. Overall, the Metakaolin market in Asia displayed varying trends during the first quarter of 2023, with India observing a decline in prices due to low domestic demand, while China experienced price increases and higher demand from international markets.
Europe
During Q1 of 2023, the construction sector in Europe witnessed a surge in demand for Metakaolin, despite the region maintaining a steady supply. This situation resulted in a price hike for Metakaolin in the European market throughout Q1. In Germany specifically, the price of Metakaolin experienced an increase of around 15%, with January and February of 2023 seeing a respective rise of 3%. This price escalation can be attributed to the growing demand for Metakaolin in the construction industry as construction activities gained momentum in Europe following the winter season. However, in March 2023, the price of Metakaolin decreased as the price of the product declined in the international market.
