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German Phosphonate Market Struggles in November Amidst Import Challenges and Economic Uncertainties
German Phosphonate Market Struggles in November Amidst Import Challenges and Economic Uncertainties

German Phosphonate Market Struggles in November Amidst Import Challenges and Economic Uncertainties

  • 18-Dec-2023 5:55 PM
  • Journalist: Li Hua

Hamburg, Germany: The German Phosphonate market experienced a bearish trend in November 2023 due to low demand from downstream industries and imports of cheaper goods in the region. In the early stages of the fourth quarter, there was a notable surge in consumer interest in fresh acquisitions of Phosphonate within the downstream water treatment, detergent, and cleaning sectors. However, the positive sentiments didn’t last long due to political and economic uncertainties. The market transactions in the region experienced a slowdown, and concurrently, the pace of supply chain operations has decreased this month.

Most of the Phosphonates are imported from the neighboring nations Lithuania, Belgium, France, and Finland, and the manufacturers have lowered Phosphonate prices in response to declining manufacturing costs attributed to the decreased prices of upstream raw materials. The German market witnessed a decrease in the prices of upstream phosphorus trichloride and yellow phosphorus, leading to a corresponding downtick in the manufacturing costs of Phosphonate this month. As of November 2023, the price of Phosphonate DTPMP-CFR Hamburg settled at USD 1473/MT.

In the latest data released by the Federal Statistical Office (Destatis), in October 2023, Germany's exports slightly decreased by 0.2%, whereas imports recorded a more notable decline of 1.2% compared to September 2023, as reported by the [source/agency]. The data, after accounting for calendar and seasonal variations, underscored a significant year-over-year (YoY) decline, showing an 8.1% drop in exports and a 16.3% decrease in imports compared to October 2022. Additionally, inbound shipments from China, Germany's primary import source, declined by 2.4% to €12.7 billion. Imports from the US exhibited varied outcomes, registering a 2.2% increase, while imports from the UK experienced a significant decrease of 15.1% in October.

According to the ChemAnalyst pricing intelligence, the Phosphonate market is anticipated to demonstrate further weakness in the next month as well owing to increased destocking practices. Most businesses aim to optimize their financial statements at the end of the fiscal year. Reducing excess inventory helps improve financial ratios and overall financial health. Additionally, companies strategically destock in December to manage their tax liabilities.

After the holiday season in Europe, businesses might anticipate a temporary decline in demand for Phosphonates, prompting them to destock to avoid holding excess inventory. Additionally, some industries plan production schedules in anticipation of reduced activity or shutdowns during the holiday season. This planning may involve reducing inventory levels to align with the decreased production of chemicals such as Phosphonates. Moreover, companies often set targets for inventory turnover, aiming to sell existing stock within a specific timeframe.

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