Weak Downstream Demand Slumps the Sodium Silicate Prices in Europe

According to ChemAnalyst, the cost of Sodium Silicate observed a declining trend in March 2023 due to the weak demand from the downstream construction industries in the European region. Rising material costs and an increase in borrowing costs have all had a significant impact on Europe's construction industry and the potential to significantly lower property prices. Businesses are reducing the scope of their construction projects to accommodate inflation due to the rising costs of construction for property developers. The exports of Sodium Silicate to overseas markets fell in March due to the gloomy global economy.

Rising inflation rates are suppressing consumer spending and construction activity through diminishing buying power and noticeably higher financing costs, while the weak global economy is reducing German exports. The easing of supply bottlenecks for intermediate products and the sharp decline in energy prices are boosting industrial activity.

Over the past year, inflation has become increasingly widespread and has remained at historic highs for several months. While inflation in all other products and services has continuously climbed, reaching 7.6% in February, the direct impact of energy costs has been gradually declining since the fall.

Additionally, the European Central Bank (ECB) made a significant rate increase in late March 2023 of about 50 basis points, demonstrating its willingness to provide banks with liquidity in the face of recent banking sector turmoil. When interest rates rise, Sodium Silicate demand usually falls, which can cause the global construction industry to suffer.

In March 2023, the price of Sodium Silicate on a FOB Hamburg basis averaged roughly USD 319/MT.

As per ChemAnalyst, the cost of Sodium Silicate is expected to decline in the forthcoming months due to the low consumption in the downstream construction industry. Further, the demand for Sodium Silicate is likely to decline due to the high interest in the European area, and it is expected that the Sodium Silicate is likely to decline by 3.5% in March 2023.