Sluggish Demand for Calcium Formate from the Construction Sector Leads to Decrease in Prices

Germany- In the European market, Calcium Formate production and sales continued to experience sluggish behavior amidst the declined feedstock (calcium hydroxide and formic acid). This slowdown was primarily attributed to a decline in demand from the construction, paints, and coatings sectors in the regional market, which had a proportional impact on the overall Calcium Formate market dynamics. The construction industry faced challenges such as elevated interest rates by the European Central Bank (ECB) and rising construction expenses, leading to reduced demand for new construction and painting projects across Europe, consequently impacting Calcium Formate prices.

Input costs have declined significantly with the feedstock prices in the middle of increased inflation rates, and the ripple effect could be seen in the current price trend of Calcium Formate in the European market. This inflationary pressure was partially attributed to higher oil and naphtha prices. On the other hand, output prices increased at the slowest pace compared to previous quarters, indicating limited pricing power in the domestic market.

New orders were declining at a faster rate than output in both manufacturing and services, as observed by the market experts, suggesting that companies may seek to reduce their production capacity of Calcium Formate in the coming quarter. Additionally, backlogs of work were decreasing, showcasing potential production cuts across both goods and services sectors. Moreover, inventory reduction remained widespread, indicating that there was no immediate relief from the ongoing destocking cycle by the Calcium Formate manufacturers, which had exacerbated the recent decline in customer demand from the construction sector, compelling the Calcium Formate manufacturers to keep the prices on the lower side.

On the trade front, Eurozone exports had shown lackluster performance in recent quarters, but this didn't necessarily indicate losses in global trade. However, due to rising energy prices, the trade surplus remained lower than it was in the past. Inflation is anticipated to stabilize further in the coming quarter, and the impact is seen on the trade surplus, which has decreased compared to previous data due to the increase in energy prices in the European region.

The report indicates that the ECB has potentially reached its peak in terms of interest rates and does not expect any rate cuts until the latter half of 2024. The ECB might also expedite the process of Quantitative Tightening (QT). As per ChemAnalyst, the Calcium Formate prices in the European market are anticipated to decline owing to the weak demand outlook accompanied by the reduced production cost of Calcium Formate in the European market.