Phosphoric Acid Market Struggles Amidst Falling Raw Material Prices and Weak Demand
- 23-May-2023 6:09 PM
- Journalist: Xiang Hong
In recent months, the Phosphoric Acid industry has faced a significant decline due to a combination of falling raw material prices, weakening cost side support, and subdued downstream demand. The downward trend has prompted industry experts to closely monitor the situation, as it carries implications for various sectors dependent on this essential chemical compound.
Firstly, the weak cost support from raw materials, particularly Phosphate Rock, Yellow Phosphorous, and Sulfuric Acid, has impacted the Phosphoric Acid market. Raw Phosphate rock, a crucial ingredient in the production of the product, has experienced a slump in pricing due to increased supply from major producers. This surplus availability has resulted in lower production costs, reducing Phosphoric Acid prices.
Secondly, tepid demand for the product from downstream industries further exacerbates the situation. This slowdown can be attributed to various factors, including reduced agricultural activities, sluggish food processing industries, and a decline in fertilizer consumption.
The agricultural sector, a significant consumer of Phosphoric Acid in the form of fertilizers, has faced challenges in recent times. Unfavorable weather conditions, coupled with a decrease in global agricultural output, have led to a reduced need for fertilizers, thereby impacting Phosphoric Acid consumption.
Similarly, the Food & Beverages industry, another major consumer of Phosphoric Acid, has also witnessed sluggish demand. Changing consumer preferences and increasing health consciousness have prompted manufacturers to explore alternatives to Phosphoric Acid in their products, such as carbonated beverages and packaged food items, leading to a decreased demand for the compound.
As a result, Phosphoric Acid producers are facing significant challenges. Profit margins have been squeezed, leading to cost-cutting measures and reduced production capacities. Some producers have resorted to scaling back operations, while others have diversified their product portfolios to mitigate the impact of the decline.
ChemAnalyst experts anticipate a further decline in the Phosphoric Acid market in the short term under the influence of negative factors.