Dwindling Demand amidst Logistical Constraints Stabilize Sodium Lignosulphonate Prices

During the first week of the month, Sodium Lignosulphonate prices in the USA market experienced a slight change of approximately 0.7%, remaining nearly balanced. This price trend was attributed to stable regional trading conditions and adequate stock availability. Unchanged raw material prices of Sodium Lignosulphonate helped reducing input cost pressure, allowing US producers to maintain their profit margins. Additionally, the Sodium Lignosulphonate price trend remained balanced due to stable Sodium Hydroxide prices. However, elevated global freight charges significantly impacted overall prices. Additionally, The U.S. economy showed signs of cooling, with moderating inflation and contracting factory activity for the second consecutive month

Sodium Lignosulphonate demand in the US market remained weak primarily due to sluggish activity in the construction sector. Data from the US Census Bureau indicated that construction spending in April 2024 was estimated at $2,099.0 billion annually, a marginal decline of 0.1% compared to the revised March estimate of $2,101.5 billion, with further decreases anticipated in the coming months. Private construction spending stood at $1,611.9 billion annually, down 0.1% from March's revised estimate of $1,613.3 billion, with continued depreciation expected in May due to elevated borrowing costs

The only area of positive demand for Sodium Lignosulphonate came from residential construction, which reached an annual rate of $890.4 billion in April, reflecting a 0.1% increase from the revised March estimate of $889.5 billion. This growth was attributed to a decline in mortgage rates, as reported by Freddie Mac, with rates for 30-year fixed terms dropping from 7.22% to 7.03% and for 15-year fixed terms decreasing from 6.47% to 6.36%. This decline in mortgage rates signalled a favourable outlook for home buying.

Sodium Lignosulphonate supply in the domestic market remained weak due to the low construction which compelled the manufacturers production adjustments. While the international order for the Sodium Lignosulphonate was also reduced amidst logistical constraints. US container import spot rates from North Asia and Southeast Asia hubs reached their highest levels in nearly two years, exacerbated by Red Sea diversions that contributed to significant capacity issues for East Asian shipping lanes. On June 7, the rate for shipments from East Asia to the West Coast of North America increased by 17%, while East Coast imports rose by 11%. Conversely, Sodium Lignosulphonate exporters faced a freight reduction of 8.5% for shipments from the North American West Coast to East Asia, and around 5% for exports from the East Coast.

Conclusively, analysts anticipate that Sodium Lignosulphonate prices are likely to fluctuate within a narrow range in the coming week. However, prices for Sodium Lignosulphonate may increase further once logistical hurdles ease.