Rising Interest Rates Dampen the Potassium Silicate Market in Eurozone

The price of Potassium Silicate has observed a declining trend during April 2023 due to the poor performance from the downstream construction and other key driving sectors. The demand for Potassium Silicate was not improved, and the product had enough supply in the market to cater to the demand from the downstream industries. Companies reported supply-side restrictions had some signs of relative improvement despite a decline in purchase activity.

The construction industry is the main consumer of Potassium Silicate in the global market. The primary reason is that adding Potassium Silicate strengthens the concrete's quality and acts as a superb sealer.

The construction sector in Europe had a downward trend as businesses cut output levels in parallel with the continuous drop in demand. Due to end-users diminished optimism about the construction industry in the second quarter of 2023—primarily as a result of rising borrowing rates, to which this industry is particularly vulnerable—new orders from end-users have decreased and have continued into this month.

The latest Purchasing Managers Index (PMI) showed the construction industry remained in contraction territory in April, with a rate of decline in industrial activity in the German market. The demand from the building sector for Potassium Silicate continued to mute by rising interest rates, tightening financial circumstances, and general economic instability.

According to ChemAnalyst, the cost of Potassium Silicate hovered around USD 1554/MT on a DDP Hamburg basis during April 2023.

The outlook for the construction industry remained pessimistic in the Eurozone for the second quarter of 2023 due to high-interest rates and volatile economic activity. The demand for Potassium Silicate might decline in the Eurozone due to weak orders from the downstream industries. It is expected that the Potassium Silicate is likely to decline from 1% to 2% during the second month of the second quarter of 2023.