Weak Consumption of Aluminosilicate Leads to Price Fall in the US and Europe

The price of AluminoSilicate witnessed a declining trend in the US market due to the bearish downstream construction industry performance during May 2023. In the domestic market, product consumption remained constant, and AluminoSilicate demand decreased.

Market participants received very fewer fresh orders overall, and this was the quickest fall in three months. Further, the market had sufficient stocks to meet the requirements of downstream industries, which reportedly drove the downturn in new orders.

The recent manufacturing Purchaser's Manager Index (PMI) data showed a down in May compared to the previous month's point. However, the data remained below threshold points, which indicates the deterioration in manufacturing activities due to the low trading sentiments in the US market.

Even though output grew in May, the rate of AluminoSilicate growth dropped to a hardly noticeable degree. A larger workforce and quick input deliveries were commonly linked to production expansion, which allowed enterprises to catch up on delays in work—the supplier's delivery times improved further and, to the greatest extent, were on record in the US market.

During the last seven days, the US construction industry remained flat and has not moved much in the market, which indicated the drop in the consumption of AluminoSilicate in the US.

According to ChemAnalyst, the cost of AluminoSilicate hovered around USD 1375/MT on a FOB Texas basis with a monthly depreciation of 2% in May 2023.

On the other hand, the German construction industry remained down in the region; the consumption of AluminoSilicate in this industry shrunk in May 2023. High-interest rates and tight financial conditions all dampened the demand for AluminoSilicate from the downstream industries.

Eurozone manufacturing PMI remained low from previous months and appeared below threshold limits. New work orders from both domestic and overseas markets fell, registering the steepest decline since last October 2022 in German. The demand for AluminoSilicate did not rise in the downstream market, and products helped to alleviate the pressure on the construction supply chains in May. Easing cost pressure and greater competition for new work meant that German manufacturers were less inclined to raise their prices.

ChemAnalyst reports that the price of AluminoSilicate was settled at USD 1260/MT on an FD Hamburg basis with a monthly depreciation of 3% in May 2023.

For the future 12 months, the picture for the US and Europe is mixed. Regarding the outlook for output over the next 12 months, US manufacturers expressed greater optimism. At the same time, worries about the global economy, geopolitical unrest, high-interest rates, and general skepticism among customers have caused European manufacturers to change their views about the outlook for the first time in 2023. It is expected that the AluminoSilicate in the German market is likely to drop from 2% to 2.5% in June 2023.