Magnesium Sulphate Prices Increase on the Back of Rising Energy Costs and Inflation

Hamburg, Germany: According to the ChemAnalyst database, the price trend of Magnesium Sulphate increased by double-digit figures in Germany during October 2022. Rising energy prices have created uncertainty for energy-intensive industries and put pressure on the Magnesium Sulphate market among manufacturers. Additionally, the downturn in the European economy, sparked by the rising inflation rate, has impacted the purchasing power of downstream fertilizer consumers and the production capacities of Magnesium Sulphate manufacturing firms. The downturn in new orders for Magnesium Sulphate from the downstream agricultural industry has been worsened by the mounting worries about the economy's dismal prospects.

Germany's largest specialty chemical company, Evonik, has started its coal plant as natural gas imports from Russia have been cut following its invasion of Ukraine, reflecting the fear of power shortages in the country. Thus, several companies have rolled to coal and other fossil fuels to sustain their operations. However, across the continent, governments and industries have also been implementing contingency plans to ensure power supply continues during the winter season.

On the other hand, witnessing the downstream fertilizers market inquiries, US Government has requested the Netherlands to release the  Russian Fertilizers. Thus, the Dutch government announced last week that it would release a consignment of 20,000 tonnes of Russian fertilizer stuck in Rotterdam port due to sanctions. Furthermore, German companies have been considering diversifying their manufacturing operations by expanding their presence beyond China, their central hub in Asia.

As per ChemAnalyst, the price trends of Magnesium Sulphate will remain buoyant in the near term against rising economic challenges and curtailed manufacturing across the nation. The natural gas and electricity costs have been impacting the operational costs and are anticipated to reflect in the quotations of Magnesium Sulphate in the regional markets. However, on the downstream front, the market transactions from fertilizer industries for Magnesium Sulphate have been weak and will continue to be bearish in the forthcoming weeks.