For the Quarter Ending December 2024
North America
Metakaolin prices remained relatively stable during Q4 2024, despite continued downward pressure from the construction sector's ongoing slowdown. Weak demand persisted throughout the quarter, with declining cement production further exacerbating market challenges. Rising production costs, combined with logistical disruptions such as the strike between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), created significant transportation challenges. These disruptions hindered supply chains and increased logistics expenses, adding to the overall market strain.
Toward the end of the quarter, destocking activities became the dominant trend, as suppliers focused on liquidating inventories. Concerns over inventory devaluation and seasonal market slowdowns prompted bulk sales at reduced prices, particularly in export markets.
While supply conditions improved due to these activities, the broader market fundamentals remained weak. Limited construction activity and subdued demand from downstream industries ensured that the Metakaolin market faced sustained challenges as it approached the year-end, with cautious anticipation of stabilization in the following year.
Europe
The European Metakaolin market experienced a predominantly bearish trend, with prices decreasing by approximately 1.5% during Q4. During the first half of the quarter, production costs rose, prompting producers to pass these increases downstream. However, logistical challenges emerged as modernization programs at key Northwestern European ports disrupted material circulation.
Demand conditions remained weak, particularly in the downstream construction sector, where the cement industry continued its downturn. Toward the end of 2024, destocking activity picked up as buyers reduced inventories ahead of the new year, anticipating softer market conditions due to winter. This destocking contributed to improved supply availability, reinforcing the ongoing bearish market trend.
The market surplus persisted as a significant pressure point, with demand further declining amid the seasonal slowdown. Supply remained ample, supported by limited outages and reduced run rates. While there were no major logistical disruptions, trade across Europe faced constraints due to the closure of key routes, restricting product movement. Inland trading activity remained sluggish, exacerbated by congestion at Northwest European ports.
High yard utilization rates at CTA and CTB terminals in Hamburg, estimated at 75%-80%, caused delays in cargo handling, adding to the market oversupply. With the holiday season and ongoing bearish fundamentals, some producers reduced run rates in an attempt to rebalance supply and demand.
APAC
The APAC Metakaolin market experienced a bullish trend in Q4 2024, with prices rising by approximately 4%, primarily due to higher production rates and limited availability of feedstock kaolin clay. Toward the end of the year, destocking activities intensified in December, as suppliers moved inventories in bulk. Export demand conditions remained weak in key markets, prompting Chinese suppliers to lower quotations, particularly targeting Southeast Asian buyers, with negotiations ranging from Yuan 10/MT to Yuan 25/MT. These efforts were driven by concerns over inventory devaluation and year-end tax implications, while full warehouses added further downward pressure on prices. The US market also faced unfavorable conditions, as fears of strikes and potential customs duty changes discouraged American buyers from placing orders with Chinese suppliers.
Despite a marginal increase in cement production between August and September 2024, Metakaolin consumption remained sluggish, reflecting broader challenges in the construction sector. Operational rates for clinker lines and grinding mills fell significantly year-on-year, with average rates dropping to 47% and 40%, respectively. In Jiangsu and Zhejiang, production cuts between late September and October reduced output by 35%. By November, mixed demand trends emerged as the business activity index for construction fell to 49.7%, signaling contraction, while the new order index stagnated at 43.5%. Although input price pressures eased, with the index dropping to 48%, sales prices and employment indices continued to face challenges, highlighting ongoing difficulties in the sector.
In December, demand from the downstream cement industry weakened further, with national monthly cement output declining 8.4% month-on-month and 2% year-on-year. For 2024, cumulative cement production fell 9.5% year-on-year to 1.825 billion tons, though the rate of decline narrowed slightly toward the end of the year. Shipment rates also dropped, reflecting seasonal factors, colder temperatures, and stricter environmental regulations in northern regions. The national average shipment rate decreased by six percentage points month-on-month and four percentage points compared to the previous year. Despite these headwinds, cautious optimism remains as the business activity expectation index for construction rose slightly to 55.6%, indicating hope for a market rebound as conditions stabilize in the future.
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.
