Waning Demand from the Construction Sector Plunges Global Silicates Prices

The global construction sector has been going through frequent ups and downs, buoyed by different driving factors. The construction industry is one of the major economic driving sectors for most nations, like China, and any significant alteration in its dynamics affects the country's economic growth.

As per the data, global construction chemical has showcased a decline in major markets. In China, Zirconium Silicate and Calcium Silicate prices showcased a fall of around 3.8% during September 2022. On the other side, major European country Germany has witnessed a marginal price decline during this month, where the decay of around 1.2% and 2.6% was observed in Zirconium Silicate and Calcium Silicate prices in a similar timeframe.

The threat of recession has now become a reality in Europe, most industrial activities have already slowed down, and the construction sector was among the most affected. Prolonged firmness in energy prices rose the prices of construction materials like cement, concrete, and bricks, compelled builders to opt for the wait-and-see approach. High energy prices have also exacerbated the already high inflationary pressure in the European market. According to Eurostat data, the inflation rate in Europe has crossed the 10% mark, hovering around 10.1% during August 2022.

Similarly, in Asia, the Chinese market has also been bearing the burden of weakening economic activities of the country, where the construction sector remained effectively dull throughout the month. However, a significant rise in investment has been observed in China's construction sector, which eventually led to an increase in demand for construction equipment in the country. Furthermore, demand for Silicates remained better in August and September than in previous months.

As per the ChemAnalyst analysis, the construction sector of Europe and China is not going to show any notable revival in the near term. However, the efforts to boost China's economic activities and reduce the threat of recession have started showing its effect on commodities demand and prices. Consequently, the price may revive marginally and stabilize in the coming month; however, overall activities would be lower on a year-on-year basis.