Fly Ash Price Decline in China: Impact of Weak Construction Sector

In April, the price of Fly Ash in the Chinese market continued to decline, largely due to weak orders from the downstream construction and cement manufacturing sectors. Capacity utilization in the Chinese cement sector dropped to 50% in April 2024, a significant decrease from 80% in April 2023. Nevertheless, the overall production and sales of thermal coal remained unchanged, thereby maintaining stability in the overall supply. The official NBS Non-Manufacturing PMI for China also declined to 51.2 in April 2024 from 53.0 in the previous month, indicating a reduction in activities in this sector. Real estate investment has been gradually declining in recent years, and infrastructure demand is struggling to offset the impact of the real estate downturn, further weakening support for the Fly Ash market.

On the supply side, the Fly Ash in the Chinese market has remained steady, with no disruptions. However, continuous rainfall in the East China region has resulted in sluggish demand and average enterprise shipments. Additionally, higher inventories in the downstream industry, along with weak market demand and sales, coupled with infrastructure challenges, have contributed to the sluggish market conditions. The demand for Fly Ash was low due to weak downstream construction activities. Despite this, there was sufficient availability of the material. The market experienced subdued demand as construction projects slowed down, leading to a surplus of Fly Ash.

Nevertheless, the concrete market demand has contracted in South China due to recent issues with real estate repayments. The market conditions in China reflect broader economic challenges, including the impact of the real estate slowdown and the ongoing transition towards a more consumption-driven economy.

The decline in the Chinese Fly Ash market is part of a larger trend in the global construction and cement industries. The global construction sector has been facing challenges, including rising material costs, supply chain disruptions, and labor shortages.

From January to March, there was an 11.1% decrease in the construction area of real estate development enterprises, accompanied by an 11.7% decrease in the residential construction area. These figures indicate a weakened demand for cement, and by extension, Fly Ash, which is commonly used as a supplementary cementitious material in construction.

Looking ahead, the Fly Ash market in China and globally is likely to continue facing challenges. Overall, the Fly Ash market in China is currently experiencing a downturn, driven by weak demand from the construction and cement sectors. While supply remains stable, the market is facing challenges such as high inventories, sluggish demand, and infrastructure issues.