Yellow Phosphorus demand is likely to surge by 10-12% on a Y-o-Y basis in January 2022
- 12-Jan-2022 3:19 PM
- Journalist: Bob Duffler
At the end of the third quarter of 2021, the Yellow Phosphorus witnessed unprecedented growth of market sentiments throughout the Asia Pacific region, and the offers were soared to historic highs. This pricing development is majorly attributed to the stricter implementation of dual control norms in the Chinese domestic market to curb carbon emission and control the power consumption ahead of the upcoming winter season. In repercussion output efficacy for Yellow Phosphorus production plunged drastically in the Chinese domestic market and the downstream buyers tend towards the Vietnamese suppliers to procure better volumes at feasible rates. Therefore, the overseas inquiries piled up, and due to the hiked freight costs deliveries were delayed by over a month, which ultimately forced the Vietnamese players to hike the offered quotations for Yellow Phosphorus.
Currently, the supply-demand gap has reduced and equilibrium has been established among the production output and inquiries from the downstream industries. In response, the offers witnessed significant ease in the offered quotations throughout the fourth quarter of 2021. However, the upcoming scheduled turnaround during the Chinese Lunar New Year and speculation regarding the forced closure of production facility during and ahead of the upcoming Winter Olympics in China concerned the downstream buyers regarding the supply glut in the forthcoming period. Therefore, it is expected that the downstream buyers would likely restock their Yellow Phosphorus inventories before the upcoming holidays in China and it’s been concluded that the inquiries were likely to surge in January and the players were again leaning towards the Vietnamese suppliers to ensure the supply of Yellow Phosphorus.
As per ChemAnalyst, the pricing trend for Yellow Phosphorus in Vietnam observed growth of 79.25% throughout Q3 2021. The downstream Lithium-Iron-Phosphate (LFP) battery segment is anticipated to grow at a CAGR of 15% in 2022. Therefore it is expected that the demand for Yellow Phosphorus in the APAC region witnessed an increment of 10-12% in January 2022 compared to January 2021 which proportionally impact the producer's quotations to stagger upwards in Southeast Asia.