During the early week of July 2025, the Tetrakis Hydroxymethyl Phosphonium Sulfate (THPS) market continued to face downward pressure in Asia and North America. In China, elevated inventories and subdued spot activity persisted, while downstream consumption in coatings remained sluggish. The U.S. market mirrored this trend, with declining construction spending and reduced rig activity limiting chemical offtake. Limited seasonal water treatment demand offered marginal support to the THPS market, but insufficient to reverse the broader market softness.
In China, THPS producers faced continued oversupply amid weak procurement momentum. Feedstock formaldehyde prices remained low, while phosphorus trichloride costs edged up slightly, keeping production costs stable. Market discussions stayed muted, as buyers showed little urgency to restock. Confidence remained low as downstream sectors showed no signs of meaningful recovery.
THPS domestic demand remained weak across key segments. The coatings and construction industries— THPS consumers—continued to underperform amid falling home prices and sluggish real estate investment. China's chemical producer price index registered another year-on-year decline in June, reflecting persistent oversupply and industrial malaise. Overseas interest also declined, especially from ASEAN nations, where extreme weather events disrupted construction timelines and dampened buying appetite.
Exporters in China faced stiff resistance in external markets, with traders across Southeast Asia adopting a wait-and-watch approach. Spot transactions focused on immediate needs, with little inclination toward forward commitments.
In India, demand for THPS remained weak. Water treatment maintenance offered some seasonal support, but broader industrial demand, particularly from coatings and construction, remained slow due to project delays and labor migration during early monsoon onset. Buyers continued to limit purchases to spot volumes.
In the U.S., THPS demand remained subdued across key end-use sectors. The paints and coatings segment saw reduced consumption amid a continued construction slowdown. According to recent data, national construction spending declined further, with both residential and nonresidential projects facing budget constraints and delayed approvals. This restrained chemical offtake, particularly in architectural applications.
Additionally, THPS oilfield-related demand weakened further. The Baker Hughes report indicated a weekly decline in the U.S. land rig count, with total North American rigs down recently by 70 year-on-year. The decline in drilling activity reduced demand for THPS in upstream operations. Water treatment demand held steady, especially from municipal segments, but remained insufficient to lift overall market sentiment.
As per the ChemAnalyst, some seasonal support may emerge from increased municipal and industrial water treatment activity in coming weeks. Additionally, early procurement ahead of China’s October holidays could offer brief relief to the market.
