Global Magnesium Sulphate Prices Show Bearish Trend Amid Weak Demand

The Magnesium Sulphate prices showcased bearish sentiments in the global market during June 2023. In the overseas market of Europe and North American region, the available inventory levels were adequate. Meanwhile, the offtakes remained sluggish amid limited procurement activities from buyers. The demand was soft from the downstream agriculture sector amid depressed activities in the agriculture sector and declined orders for agrochemical products. Simultaneously, the Magnesium Sulphate order was inadequate from the Pharma sector.

At the same time, production costs of Magnesium Sulphate decreased by almost as the raw material Sulphur prices declined further amid weak demand from fertilizer industries. Simultaneously, the decline in input costs due to the decline in Dutch TTF Natural Gas prices amid subdued demand and high inventories eased the cost support on Magnesium Sulphate.

During the month, the hike in bank interest rates by European Central Bank made the buyers conscious, and purchasers avoided any unnecessary trading activities. Consequently, the decline in consumption rates raised domestic inventory levels. Similarly, in the USA, the hike in bank interest rates by the US Federal Reserve during the H2 of June 2023 made the buyers conscious while making purchases. Meanwhile, the normalization in the freight costs due to the strengthening of the US Dollar reduced the import prices of Magnesium Sulphate in the North American region.

As per the ChemAnalyst data sources, the import prices of Magnesium Sulphate in the USA decreased by USD 10/MT due to the strengthening of the US Dollar, while the prices of Magnesium Sulphate in Germany dropped by USD 5/MT and witnessed 375/MT.

Conclusively, the USA's and Europe's manufacturing Purchasing Manager's index dropped again during June 2023 and remained below 50, indicating further contraction in manufacturing activities.

In Asia, the decreased cultivation rates of Palm trees in key regional producing countries Indonesia and Malaysia reduced the consumption rates of the Magnesium fertilizer. At the same time, production costs contracted as the raw material Sulphur prices declined further amid weak demand from fertilizer industries. The Magnesium Sulphate prices in China decreased by almost USD 4/MT during the month and witnessed USD 106/MT. However, In India, improved demand from buyers due to restocking practices of agrochemical products by distributors before the Kharif season in the agriculture sector provides cost support. Magnesium Sulphate prices in India rose by USD 7/MT and hovered at USD 114/MT.

As per the estimation, the Magnesium Sulphate price trend is likely to improve in the upcoming month as the material availability will be under stress due to storms and typhoons in the Asian region. Simultaneously, in the US, the arrival of the hurricane season will impact the supply rates in the market. The demand for agrochemical products in the agriculture sector will likely improve from mid-Q3 2023.