Spiked Manufacturing Costs Impact the Magnesium Sulphate Prices in Germany

Frankfurt, Germany: In the German domestic market, Magnesium Sulphate prices have been continuously rising since the start of the fourth quarter of 2022. The western sanctions against Russia have become collateral damage on various commodities, including Magnesium Sulphate. The rising inflation and the surge in TTF natural gas costs have led to the increment in the manufacturing costs of Magnesium Sulphate in the German domestic market. High electricity costs have also impacted the operational expenses of Magnesium Sulphate. In November 2022, Magnesium Sulphate prices escalated by double-digit figures.

According to German officials, the country will soon get its first floating natural gas terminal. Enough LNG from Nigeria is being transported to supply 50,000 homes and businesses for a year. After Russia's natural gas supplies were reduced, the Government spent billions of Euros building LNG import sea terminals to secure the country's energy supply. However, Klaus Müller, the head of the German Federal Network Agency, Bundesnetzagentur, stated that to save more gas as winter approaches and Russian gas imports are reduced, German homes and businesses must turn down their heat use.

As per the observed market scenario, after months of gains in the wake of Russia's invasion of Ukraine, the soaring energy prices in the most prominent European economy have started to weaken, which was reflected in the slight decline in inflation. On the demand side, the inquiries from the downstream agrochemicals sector have remained on the lower end, as the off-season effect was prominent. Moreover, the pressure on the supply side remained unchanged.

The pricing intelligence of ChemAnalyst anticipates that the Magnesium Sulphate prices are likely to sustain buoyancy in the German domestic market. The operational costs of the energy-intensive downstream fertilizers industries are projected to remain elevated by spiked natural gas prices. However, the agrochemical industry's downturn in demand will negatively impact the Magnesium Sulphate market in the forthcoming weeks.