Bull Run of Raw Materials Continue, Pushing Up Prices of Silica in Indian Market

Recently, rubber grade Silica prices were observed to be rising across Indian market, which has started concerning downstream end users. As per ChemAnalyst sources, rising raw material cost has remained a prime factor behind this consistent rise in prices of Silica, despite modest to stable offtakes from the domestic downstream rubber industry. However, since the first week of January, demand fundamentals for Silica remained firm in India, as economic activities started again at a normal pace after showing marginal dullness during December.

As per market sources, price of two major raw materials i.e., Soda Ash and Sulphuric Acid has been rising since October on the back of high demand and inflationary pressure hovering in the global market. It was observed that Soda Ash price has risen by around 50% within past six months in India, while Sulphuric Acid price has almost doubled during past 4-5 months in the domestic market. There were different reasons responsible for these augmented climbs in raw material cost, like Sulphuric Acid was primarily rising due to high upstream values and prolonged hike in catalyst cost, meanwhile Soda Ash rose on the back of high demand and temporary halt in imported products from Russia. Furthermore, global silica sand players have been doing price revisions on their cargoes due to rising packaging, transportation, and maintenance cost, which is also remained a factor behind these frequent price revisions.

As per ChemAnalyst analysis, Silica price are expected to remain buoyant for further weeks in India, which may show some ease by the mid of March. Despite raw material Soda ash and Sulphuric Acid have shown some ease in the domestic market, their prices are still hovering at a highly inflated value. Nevertheless, demand fundamentals are anticipated to remain modest to stable and no drastic change in demand scenario is expected from downstream rubber industry in forthcoming months.