For the Quarter Ending September 2024
North America
The North American Metakaolin market experienced a predominantly bullish trend in the third quarter of 2024, driven by production losses attributed to the ongoing hurricane season. This led to moderate availability of Kaolin clay, significantly impacting Metakaolin production as electricity prices rose throughout the quarter, according to the US Energy Information Administration (EIA), further increasing production costs. Hurricane-related outages contributed to low Metakaolin production levels in the US market. However, demand conditions from the cement and commercial construction sectors remained unfavorable.
High mortgage rates at the beginning of the quarter dampened the pool of prospective homebuyers, exerting downward pressure on demand for Metakaolin. Additionally, as the quarter progressed, uncertainties related to the upcoming election season caused apprehension among the local populace, resulting in reduced spending in the construction sector. This uncertainty further constrained procurement activities for Metakaolin, adding to the challenges faced in the market.
Overall, while price trends remained upward, external factors such as weather disruptions and economic uncertainties significantly influenced market dynamics.
APAC
The third quarter of 2024 in the APAC region experienced a significant increase in Metakaolin prices, influenced by various factors. Challenging weather conditions in North China reduced mining activities and limited the availability of Kaolin, a crucial feedstock for Metakaolin production. This scarcity, coupled with subdued demand from the downstream cement industry, created supply constraints that pushed prices upward. The impact of Typhoon Yagi further exacerbated production losses in the chemical industry. China saw the most substantial price changes, with prices surging by 10% due to flooding in East China and ongoing liquidity issues in the construction sector. Demand from the primary cement industry remained negative, as China's Construction PMI dropped from 51.2 in July to 50.6 in August 2024. Cement output also declined, falling from 16,397 tons in June to 15,368 tons in July, with further declines expected in August. The China Cement Association (CCA) noted a "continuous decline in demand" and reported that four of the six major cement companies experienced revenue drops, leading to an estimated loss of about $140 million in the first half of the year. Cement output decreased by 13%, from 980 million tons in the first half of 2023 to 855 million tons in the same period in 2024. Overall, pricing trends in the region demonstrated seasonality, with a 5% increase from the previous quarter. Prices rose by 2% when comparing the first and second halves of the quarter, reflecting tightening market conditions. Despite disruptions such as plant shutdowns, the quarter concluded with Metakaolin priced at USD 41/MT FOB Shanghai, highlighting a consistently positive pricing environment driven by supply constraints and robust dynamics.
Europe
The third quarter of 2024 in the European Metakaolin market saw a notable uptrend in prices, driven by constrained supply due to low production activities and adverse weather conditions. Declining mining activities further exacerbated the demand-supply imbalance, while logistics challenges, particularly in transportation, also contributed to rising prices. In Germany, cement production fell by 9.6% to 13.810 million tons, down from 15.271 million tons last year and 17.767 million tons the year before, signaling low demand conditions. The construction sector faced a steep downturn, particularly in the housing market, which negatively impacted demand for Metakaolin from the paints and solvent industries. Although civil engineering showed some resilience, activity in the construction sector overall fell at an accelerated pace, with commercial building projects experiencing their fastest rate of decline since early in the year. Price pressures in construction eased, with purchasing costs and subcontractor rates falling for five consecutive months. Germany experienced a 5% increase in Metakaolin prices, ending the quarter at USD 110/MT FOB Hamburg. This reflects the strong correlation between low production activities and price hikes, underscoring a consistent upward pricing trend throughout the quarter.
For the Quarter Ending June 2024
North America
The second quarter of 2024 has stabilized in the Metakaolin market in North America, marked by a mixed trend in prices during this quarter. The decline in Metakaolin prices in May 2024 has been influenced by several significant factors, primarily the reduction in crude oil costs, ease in the Kaolin clay prices, and oversupply conditions. The depreciation in the prices of upstream has notably eased production costs, contributing to lower Metakaolin prices. Furthermore, an oversupplied market condition, driven by excess inventories and high stockpiles of Metakaolin, exacerbated the price decline.
Turning to June 2024, the end of the second quarter witnessed prices of Metakaolin increase due to heightened production costs and cautious operations across the US Gulf Coast and Louisiana despite demand conditions being largely unfavorable from the downstream construction market. The increment in the prices is further attributed to lengthened delivery times and higher transportation costs which further pushed the prices of Metakaolin to the higher end. Higher mortgage rates are expected to further cast a negative sentiment for the transactions in the downstream construction industry keeping overall demand conditions moderate. The procurement activities from the industrial application remained positive for the time being.
The correlation between reduced upstream prices and slow downstream demand was evidence of stability in the Metakaolin prices. Disruptions such as issues with maritime transportation and highway insecurity further complicated the supply chain, adding to the tightening of supplies in the US Metakaolin market.
APAC
During Q2 2024, the pricing environment for Metakaolin in the APAC region exhibited a marked upswing. Several critical factors contributed to this trend, notably the heightened demand from the construction and cement sectors, spurred by favorable economic conditions and ongoing infrastructure projects. The onset of peak construction season further bolstered the demand, while adverse weather conditions and logistical challenges intermittently constrained supply, magnifying upward price pressures. An essential aspect was the limited availability of raw materials, such as Kaolin clay, due to mining difficulties and transportation disruptions, thus exacerbating the supply-demand imbalance. Focusing on China, where the most significant price fluctuations were observed, the market dynamics were particularly pronounced. The quarter demonstrated a clear seasonal pattern, with prices steadily climbing in response to consistent demand from downstream industries and constrained supply chains. Overall, the price trend in China correlated strongly with supply-side constraints and robust demand, leading to a positive price sentiment throughout the quarter. The price environment, therefore, remained decidedly bullish, culminating in a quarter-ending price of USD 41/MT of Metakaolin (MK0) FOB Shanghai. The consistent increase in prices underscored the resilience and strength of the underlying market factors driving the Metakaolin market in the APAC region during this period.
Europe
The second quarter of 2024 has been characterized by a pronounced decline in Metakaolin (MK50) pricing across the Europe region, driven primarily by adverse market dynamics and external disruptions. The ongoing challenges within the construction sector, compounded by persistent weather-related issues, have significantly dampened demand for Metakaolin. Flood-induced logistical disruptions and elevated transportation costs further exacerbated market conditions. Industrial production faced setbacks due to both reduced output and lower new order volumes, reflecting a cautious sentiment among manufacturers. The inflationary backdrop, albeit slightly improved, did little to spur demand within the key downstream industries, including cement and ceramics. Focusing on Germany, the epicenter of price volatility, the market saw a marked downturn amidst a backdrop of constrained demand and supply chain inefficiencies. The German construction sector’s persistent underperformance, underscored by declining building permits and new orders, contributed significantly to the negative pricing environment. Seasonally adjusted factors, such as flooding and subsequent repair delays, further strained the market. The overall trend suggests a steady decline, with a notable correlation between adverse weather conditions and logistical challenges. The sum of these factors culminated in the latest quarter-ending price of USD 107/MT for Metakaolin (MK0) FOB Hamburg in Germany. This quarter’s pricing environment has been decidedly negative, reflecting the compounded impact of supply chain disruptions, weak demand, and seasonal challenges. The outlook remains cautious as the market continues to navigate these persistent headwinds.
For the Quarter Ending March 2024
North America
The North American Metakaolin market continued to be driven by high demand with prices continuing to increase. The demand from the cement sector was recorded to have been strong as mortgage rates neared stabilization and the spring home buying season approached.
A well-performing sector was indicated by the completion of housing projects and the perennial shortage of second-hand houses. House sales continued to expand throughout the first quarter including outlays and commercial activities. On the other side, overall housing inventory continued to diminish with realtors being more active, particularly in February and March 2024. This all led to a high consumption of cement consequently leading to increments.
Moreover, commercial activities also continued to expand as indicated by the increased number of renovations across the major US hotel players. However, at the beginning of the year here construction sector usually witnesses moderation in the US, and challenging weather conditions continued to drive the US Metakaolin market as limitations in transportation and logistics continued to prevail increasing the lead times for deliveries.
Asia
The first quarter of 2024 witnessed prices of Metakaolin increase by approximately 2% across the Asian market despite the construction continuing to underperform. The Asian Metakaolin market was primarily driven by the limited availability of feedstock Kaolin Clay due to challenging weather conditions across North China. This consequently led to limited mining activities and limited the availability of Kaolin Clay, which consequently led to moderate production of Metakaolin. The only support to the Asian Metakaolin market was provided from the demand side, due to healthy transactions in the downstream ceramic industry owing to the Chinese Lunar New Year festive season. However, the demand from the downstream cement sector continued to remain low as cement production and cement exports from China continued to decline throughout the first quarter of 2024. With weather conditions remaining mostly challenging, construction activities across China failed to gather substantial momentum. Moreover, after the termination of the festive Chinese Lunar New Year, the demand from the downstream ceramic industry also faded as post-festive dullness prevailed, thereby reliving any support from the demand side.
Europe
The European Metakaolin market witnessed an appreciation of approximately 1% during the first quarter of 2024. The European Metakaolin market was largely driven by challenging conditions across the supply chain system stemming from strikes from Union workers regarding low wages. This led to limited functionality in railways and trucking activities, which consequently led to increments in lead time for deliveries. The demand for the product remained moderate across the Eurozone and mainly existed from the Dutch, Belgian, and British markets where construction activities improved. However, across the domestic German market, demand conditions continued to remain unfavorable as the construction sector continued to remain in retrenchment for the fifteenth consecutive month. All segments of the construction sector namely, residential construction, commercial construction, and civil engineering witnessed significant contraction towards the end of March 2024. Residential permits continued to decline with real estate continuing to exhibit a pessimistic outlook for the year ahead and investment sentiments continued to remain in the negative territory.
For the Quarter Ending December 2023
North America
The market situation of Metakaolin witnessed a bullish situation across the North American market during first half of fourth quarter of 2023 as input costs in the construction Sector in the United States witnessed a sharp increment.
Mortgage rates touched approximately 8% for a 30-year fixed term and 7% for a 15-year fixed term, according to Federal Home Loan Mortgage Corporation (Freddie Mac), leading to a subdued demand from the housing industry. The bullish trend was mainly attributed to well performing construction sector across the importing Mexican market, as nearshoring activities continued. Government funded construction activities were recorded to a healthy including the construction of a new airport and railway station and major automotive industries setting up manufacturing bases across Mexico. This consequently kept the prices of Metakaolin across the United States largely afloat.
US manufacturing activities also recorded a softer downturn in December which also disturbed the balance between demand and supply, keeping the market situation largely bullish. The secondary demand from importing Canadian market was also recorded to be low. Amidst the overall moderate demand during December 2023, weather conditions in the United States deteriorated, leading challenging conditions in transportation and logistics, further increasing lead times.
APAC
Metakaolin pricing in the APAC region witnessed a bullish market situation throughout the fourth quarter of 2023 mostly attributed to limited availability of feedstock kaolin clay. Firstly, the market experienced moderate supply levels due to limited mining activities caused by adverse weather conditions, particularly heavy rain, and snow in certain regions. This led to a decrease in the availability of the feedstock kaolin clay, impacting the overall supply of Metakaolin. Secondly, demand for Metakaolin remained moderate, primarily driven by the downstream ceramic industry. The festive season, such as the Mid-Autumn festival, boosted purchasing activities in this sector. However, demand from the construction industry was weak, as major developer firms across the APAC region faced financial difficulties and postponed acquisition of raw materials. Prices increased by approximately 5.2% in November 2023, driven by supply disruptions caused by bad weather and limited mining activities amidst a moderate demand from government funded activities and importing Southeast Asian market. However, prices plummeted by approximately 6% in December 2023 as the importing Southeast Asian market entered a post-festive season and experiences destocking activities driven by depreciating energy costs which deflated factory gate charges. In terms of price trends and seasonality, the price of Metakaolin in APAC region during the fourth quarter of 2023 remained relatively stable compared to the same quarter of the previous year. There was no significant change in the price percentage from the previous quarter. Additionally, the price comparison between the first and second half of the quarter showed a slight decrease of 3%. Overall, the Metakaolin market in the APAC region during the fourth quarter of 2023 was influenced by limited supply due to adverse weather conditions and moderate demand from the downstream ceramic industry. The price of Metakaolin in China at the end of the quarter was USD 36/MT FOB Shanghai.
Europe
In the fourth quarter of 2023, the Metakaolin market in Europe experienced some notable developments. Firstly, the limited availability of kaolin clay due to the closure of mines caused by heavy rains in Southern Germany impacted the supply of Metakaolin. This scarcity led to a slight increase in prices as manufacturers aimed to improve profit margins amidst recessionary conditions. Secondly, demand from the downstream construction sector remained subdued, with slow growth in overall industrial production and the ceramic industry. However, there was moderate demand from ongoing construction projects and government-funded initiatives. Lastly, the housing crisis in Europe, particularly in Germany, led to increased input costs, which further contributed to the upward trend in prices. During this quarter, there were no reported plant shutdowns in the Metakaolin market. In Germany, the largest market in the region, the price of Metakaolin increased by 2% in October. This was primarily due to the rising prices of LNG, which raised production costs and electricity charges. Additionally, demand from the construction sector remained moderate, supported by government-funded programs and the need for infrastructure refurbishment. The price of Metakaolin (MK0) FOB Hamburg in Germany for the fourth quarter of 2023 is USD 106/MT.
