Phosphoric acid seesawed in China in February
Phosphoric acid seesawed in China in February

Phosphoric acid seesawed in China in February

  • 07-Mar-2022 4:35 PM
  • Journalist: Nina Jiang

During the month of February, Chinese Phosphoric Acid prices showed varied sentiments. In the initial weeks, Phosphoric Acid prices fell due to low production rates and suspended economic operations. Despite strong cost support from upstream Sulphur, sentiments in the Chinese Phosphoric Acid market have weakened, and offers have dropped dramatically. This market movement, according to some industry experts, is the result of a halt in chemical fertiliser ingredient shipments and a pandemic-induced spike in freight charges. As a result, when the market reopened after the Lunar New Year holidays, there were no major gains, and the FOB Qinzhou discussion for Phosphoric Acid closed at USD 1620 per tonne for the week ending February 11th, 2022.

Whereas during mid-February, the Fertilizer prices started to soar again. On the supply side, natural gas prices grew, greatly increasing the cost of phosphorous production. Increasing Energy has a lot affected the mining expenses of phosphate and potash. As a result, the rising price of natural gas entirely explains why all fertilisers grew in price by the same proportion. Furthermore, Shipping expenses grew considerably, particularly for shipments from Asia to North America, because of increased demand. High crop prices encourage farmers to apply more fertiliser per acre, putting pressure on fertiliser prices. FOB-Qinzhou prices for 85% grade Phosphoric Acid are quoted as USD 1830/MT for the last week of February, which showed a change of 11% in the Phosphorous acid pricing for the whole month of February.

On the other hand, Russia's subsequent export limits, the implementation of countervailing taxes, on Russian and Moroccan phosphate fertilisers have pressurized domestic fertilizer manufacturers. However, the apparent lack of a post-invasion price surge shows that traders are not yet concerned about global fertiliser scarcity. Fertilizer prices are likely to fall as natural gas and agricultural product prices fall.

As per ChemAnalyst “The current trend is likely to prevail for the short term and the market sentiments are anticipated to remain mixed for the short term. Although, the prices are expected to rebound as the operating rates might get increased further in the month of March” 

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