European Metakaolin Prices Increased to Revive Producers’ Profit Margins, August 2023

Prices of Metakaolin have increased by almost 2% in the month of August with a marginally bullish situation being observed in the German market, as downstream construction industry improved moderately in the commercial segment in the same month. Trading activities have somewhat resumed in the European region as ongoing infrastructure projects UK, Germany, France, and Italy cause a resilient demand from the commercial building sector which continued to expand throughout August 2023.

Construction activities have also noticeably improved with the United Kingdom recording a healthy performance across the Eurozone and Germany exhibiting the weakest. Key market players have stated that a resilient demand for commercial work and infrastructure projects is helping to stabilize prices of the Metakaolin but the prime demand of Metakaolin from the downstream residential sector continues to show a disappointing performance. Prices of Metakaolin exhibited an increment in the European region despite depreciations being recorded in the prices of energy and electricity and a low demand from the prime residential sector in construction industry which saw a worst performance in the month of August across the Eurozone, with prices of existing houses declining by almost 5% in August in the UK and construction of new houses being halted.

Moreover, supply disruptions have been recorded in the regions of western and southwestern Germany where heavy rainfalls have been recorded and resulting floods have led to supply disruptions, from where feedstock kaolin is primarily mined, may have contributed to hikes in the prices of Metakaolin.

The procurement sentiments of Metakaolin across Europe were mainly cautious as the key market players fear that a marginal recovery of the construction sector across Europe may not be for a long-term basis with most of the economic indicators showing a negative trend such as average interests’ rates being recorded being over 4% in the residential sectors across the Eurozone in July with further appreciations expected in August.

A cautious spending activity amongst consumers across the European region is further likely to cast a depressing outlook on the market situation for Metakaolin prices. Furthermore, demand for Metakaolin from outside Europe was also not healthy as few import orders were placed from Asia and North America. Prices of Metakaolin have declined continuously for the last 7 months as profit margins amongst distributors in the existing market were mostly negligible, therefore quotations were increased to revive profit margins. Prices of Metakaolin are expected to further decrease in the last quarter of 2023 across the European market as the construction industry might continue to struggle for revival.