Phosphoric Acid prices constantly surging in China

The Phosphoric acid market continues to fluctuate as the prices spike up in China amidst the ongoing conflict between Russia and Ukraine. Russia is limiting its export of upstream crude oil, which in turn, is giving rise to inflation in the global market and impacting all the value chains linked directly or indirectly to the feedstock Natural gas and Direct fuels.

On the other hand, the upstream Phosphate rock market maintained a stable shipment situation, the yellow phosphorus market was tight in supply, and the prices rose rapidly in the first week of March. Cost support from the upstream sulphur was high, witnessing a significant increment in the production cost of Phosphoric Acid in China. The FOB Qinzhou discussions for Phosphoric acid were settled at USD 1950 / ton, by the end of the first week of March.

FOB – Qinzhou prices for 85% grade Phosphoric Acid was quoted as USD 2150/ ton for the second week of the month which indicated a 12.86% increment in the prices of Phosphoric acid to date.

South Korea and Thailand, the two huge importers of Chinese Potassium based fertilizers are expected to raise their demand in future, owing to the upcoming rice plantation period starting in April. China is likely to limit its export due to robust demand, which will greatly influence the supply and can create a demand-supply gap for downstream fertilizer. Impact on the Asian food industry is likely to be seen as well because of the high consumption of rice in their regular meals. Inflation in both the agriculture and food sector will increase the prices of basic commodities across Asia.

As per ChemAnalyst, “The current trend is likely to prevail for the entire month of March and the market is estimated to continue to inflate for quite a while till the conflict is resolved and the market gets stabilized”.