For the Quarter Ending September 2023
North America
In the third quarter of 2023, the Phosphonate market in the USA demonstrated mixed sentiments and the prices fluctuated throughout this period. In the first two months, amid the ongoing summer season, the demand outlook was positive, and steady inquiries from the downstream water treatment and other end-use industries were registered. As per the government GDP data, the economy improved at an increased pace from July to September, despite higher interest rates, depleted pandemic savings, and high inflation. Overall, the market transactions were usual and the trading atmosphere was normal. Albeit, in September, the prices decreased slightly as the demand conditions stagnated. Consumer inquiries remained weak, particularly with the end of the high-demand summer season and the buyers were mainly focusing on long-term orders of the product. Overall, the market transactions remained sluggish, and limited product procurement was observed overall. Throughout this quarter, high inflation, higher interest rates, and ongoing geopolitical tensions with China also influenced the market sentiments in the region.
APAC
Over three months from July to September in the Chinese domestic market, the Phosphonate industry witnessed notable fluctuations in prices and market conditions. In July, the market sentiments for Phosphonate took a hit due to weak demand from downstream sectors like detergents, cleaning, and water treatment. Consequently, the prices saw a significant drop. Manufacturing activities, as indicated by the NBS manufacturing PMI, remained subdued at 49.3, reflecting a decrease in factory operations due to declining new orders and export sales. Additionally, factory gate deflation led to shrinking profit margins for domestic manufacturers. Purchases of Phosphonate were primarily driven by demand, and production rates were maintained. August saw a further decline in Phosphonate prices, with weak demand persisting. Downstream sectors showed low interest as material availability was sufficient. While domestic manufacturing activities improved slightly, there was some cost support from increased prices of upstream Yellow phosphorus. In September, Phosphonate prices rebounded due to improved demand from the detergent, cleaning, and water treatment industries. Production costs rose with increased pressure from upstream Yellow phosphorus prices. As of September 2023, the prices of Phosphonate in China were assessed at USD 1290 per tonne.
Europe
Over three months from July to September in the German domestic market, the Phosphonate industry experienced a persistent decline in prices and challenging economic conditions. In July, Phosphonate prices in Germany decreased by 6.0%, reflecting a continuous downward trend. This decline was exacerbated by the Eurozone's manufacturing PMI falling to 42.7, indicating a year of consecutive contractions due to higher borrowing costs imposed by the European Central Bank (ECB). The German manufacturing PMI also deteriorated, dropping to 38.8, signifying worsening conditions in the German manufacturing sector. August witnessed further price drops for Phosphonate in Germany as weak demand continued to affect the market sentiments. The German Manufacturing PMI fell to 39.1, remaining well below the 50-point benchmark, primarily due to consumer uncertainty, instability in the building sector, and a lack of investment interest. In September, Phosphonate prices continued to decline in the German market. Low-priced imports and poor demand outlook were contributing factors. Consumer demand in water treatment and cleansing industries remained weak, with consumers making purchases in small volumes. Furthermore, inflation in Germany reached its lowest level since the Ukraine crisis, with consumer prices growing by 4.3% year on year in September, indicating economic challenges for Germany. As of September 2023, the prices of Phosphonate in Germany were assessed at USD 1078.
For the Quarter Ending June 2023
North America
During Q2 2023, the US phosphonate market experienced steady growth, driven by robust demand from key end-use industries. The water treatment sector remained a major consumer of phosphonates, utilizing them as effective scale and corrosion inhibitors in various applications, including boilers, cooling towers, and water systems. The demand for phosphonates in the detergent and cleaning industry also saw consistent growth, where they serve as chelating agents, enhancing the cleaning efficiency by sequestering metal ions and removing hard water deposits. Moreover, the agriculture industry showed sustained interest in phosphonates, employing them as plant growth regulators and anti-fungal agents to improve crop health and protect plants from diseases. In the oil and gas sector, phosphonates were in demand as scale and corrosion inhibitors, ensuring the integrity of drilling operations, production systems, and pipelines. The pharmaceutical industry continued to utilize phosphonates as intermediates in the synthesis of various drugs and active pharmaceutical ingredients. Additionally, the construction and personal care industries demonstrated a steady uptake of phosphonates for their concrete admixtures and used as stabilizers and chelating agents in personal care products. Overall, the US phosphonate prices witnessed positive growth momentum during Q2 2023, supported by the diverse applications and strong demand from key end-use sectors. After Q2 2023 ended, Phosphonate prices in the US were assessed at USD 1350 per MT on a FOB basis
APAC
In Q2 2023, the Indian phosphonate market witnessed a bearish trend as prices dropped by 1.8% in the domestic market. This decline was attributed to lower production costs, driven by weaker cost support from upstream raw materials. The cost pressure from phosphorus trichloride decreased by 1.9%, and prices of upstream yellow phosphorus dropped by 1.5% in June, contributing to lower manufacturing costs. Demand outlook remained firm in the downstream detergent and cleansing industries both domestically and overseas. The manufacturing PMI decreased to 57.8 in June from May's 58.7, indicating steady growth in factory activities. Supply chain operations remained smooth, with no major issues reported. Throughout the quarter, phosphonate prices fluctuated, influenced by demand from the detergent and cleaning industries. The market situation was bearish, and supply remained moderate while demand ranged from low to moderate. As of June 2023, Phosphonate prices in Asia were assessed at USD 1060 per MT on CFR basis.
Europe
The European phosphonate industry experienced a mixed demand landscape during Q2 2023. Demand remained stable from the downstream solvent industry, indicating a consistent need for phosphonates in various solvent applications. However, the consumption from the dyes and explosives industry remained dull, primarily due to the underwhelming performance of the construction and mining sectors. LANXESS's quarterly report highlighted the impact of high inflation rates, declining demand, and weak cost support from upstream Toluene, which affected the overall consumption of phosphonates in these industries.
Additionally, the European phosphonate market faced challenges from the freight market, which declined throughout the quarter due to slowed trading activities in Europe. This decline in the freight market led to eased shipping costs and increased availability of cheaper imports from the Asian market, influencing the competitive landscape for phosphonates in the region. Despite the mixed demand scenario and market challenges, the stable demand from the downstream solvent industry provided some support to the phosphonate market in Europe. Moving forward, the industry may need to closely monitor the developments in the construction and mining sectors, as well as keep an eye on the global energy market dynamics, to adapt and navigate through any potential headwinds in the coming quarters. After the conclusion of Q2 2023, Phosphonate (ATMP) prices in Europe were assessed at USD 1290 per MT on FD basis.
In the North American market, the Phosphonate market observed a mixed pricing trend in the first quarter of 2023. The market sentiments for the product were in positive territory in March 2023 amid increased production rates and a surge in demand from the downstream cleaning and water treatment industries. In the next month, the market prices of Phosphonate increased further owing to stronger demand in the downstream cleaning and water treatment industries and active inquiries from domestic as well as international market participants. Amid looming inflationary pressure, uncertainties regarding the economy and the collapse of two banks in the US resulted in a weaker consumer demand outlook in the last month of Q1, and hence, the market sentiments for Phosphonate exhibited a bearish trend this month.
In the first quarter of 2023, the Phosphonate market in China showcased a bullish pricing trend. In the first month of Q1, the market prices increased amid constrained availability in the domestic market and stronger cost support from the upstream Yellow phosphorus. In the second month, the prices surged amid the resumption of manufacturing activities and paced up downstream demand from the water treatment and cleaning industry. Wherein the prices inclined further in the last month owing to increased procurement from domestic consumers. The overall supply of the product was adequate and domestic manufacturers maintained stable production rates in the region.
The overall pricing of Phosphonate in the European market demonstrated mixed market sentiments in the first quarter of 2023. The product's prices surged in the first month of Q1 due to the lack of market competitiveness in the region as the Asian market activities remained at lower levels in this period. In February, market prices declined as inflationary pressures and uncertainties regarding economic conditions affected consumer sentiments in the region, resulting in limited purchases of the product. Overall market prices dropped further in March due to reduced procurement from the downstream cleaning and water treatment industries. Also, the manufacturing PMI fell amid weaker demand and a drop in input costs in the European region this month, resulting in bearish market sentiments for Phosphonate in the region.
