German Phosphonate Prices Decline in February 2024 Amid Weak Demand and Limited Cost Support
German Phosphonate Prices Decline in February 2024 Amid Weak Demand and Limited Cost Support

German Phosphonate Prices Decline in February 2024 Amid Weak Demand and Limited Cost Support

  • 12-Mar-2024 4:03 PM
  • Journalist: Harold Finch

Hamburg (Germany): The German Phosphonate market continues to showcase weakness, and prices noted a further downtrend in February 2024. Phosphonate prices again dropped by 2.7% in February owing to several reasons. The influx of cheaper goods into the domestic market of Germany, coupled with moderate demand from the downstream detergent, cleaning, and water treatment sector, has contributed to the sluggishness in the Phosphonate market. Amid weak demand across numerous European and non-European nations, operational rates among manufacturers have also decreased. European countries engage in both intra-European trade and trade with non-EU countries for phosphorus-based products such as phosphonate. Trade agreements, tariffs, and geopolitical factors have also impacted the flow of phosphorus products within Europe and between Europe and other regions.

Additionally, another reason for the price decline of phosphonates is raw materials costs. Phosphonates are generally derived from Phosphorus Trichloride, which is dependent on the phosphorus market. Europe relies on a combination of domestic production and imports for its phosphorus needs. Also, amid the upcoming sowing season, procurement continued, albeit at lower rates; however, the markets remained oversupplied. Some European countries have significant phosphate rock reserves, but others depend heavily on imports from countries like Morocco, China, and Russia.

Disruptions in shipping routes through the Middle East have hindered efforts to address inflation. Since the beginning of 2024, cargo ships traveling through the Red Sea have faced attacks from Houthi rebels, resulting in a dramatic 150% increase in shipping expenses and have led to higher import prices. Consequently, manufacturers are adjusting their prices for the first time in nearly a year to compensate for the heightened shipping costs. Shipping companies are dealing with longer delivery times and increased input expenses, prompting them to opt for longer and more expensive routes to avoid volatile regions. With disruptions in the Red Sea, which is a key route for transporting goods from Asia to Europe via the Suez Canal, retailers are being compelled to increase their stockpiles to adapt to the evolving supply chain dynamics.

As of February 2024, the prices of Phosphonate ATMP were assessed at USD 1080/MT CFR Hamburg. During this month, imports of phosphorus-based compounds, including phosphonates, from the Chinese market also slowed down due to the Lunar New Year and the Lantern Festival. During that period, the markets remained closed, and the production of goods was halted, eventually impacting the phosphonate market. According to the ChemAnalyst database, prices of Phosphonate in the German market are anticipated to increase in the upcoming weeks on the back of improved consumer demand and consequent increase in procurements in Q2 2024.

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  • 12-Mar-2024 4:03 PM
  • Journalist: Harold Finch