For the Quarter Ending June 2021
Phosphorus Acid demand remained firm across North America region during Q2 2021. The demand for pesticides was high in the meantime, as the agrochemicals sector flourished following clear weather, which boosted the demand for several fertilizers and insecticides in the USA. The demand for the downstream derivatives like PMIDA (Phosphonomethyl Iminodiacetic Acid), and ATMP (Amino Trimethylene Phosphonic Acid) remained significantly high during this timeframe, which supported its prices. In addition, limited availability of corn across the region also exacerbated the overall demand for pesticides and herbicides in the meantime.
Asian market witnessed high demand for Phosphorus Acid during this quarter. The demand was mainly driven by agrochemicals sector. In China, prices rose due to the shortage of downstream insecticide Glyphosate in the country, which pushed manufacturers to increase the production of other insecticides to satisfy the overall demand in the domestic and global market. Meanwhile in India, the demand remained modest to firm during this quarter, bolstered by significant offtakes from the domestic agrochemicals sector. Moreover, no such significant impact of second wave of pandemic was observed on demand for insecticides. However, prices underwent a modest rise due to supply hurdles from China.
Europe also witnessed modest offtakes for Phosphorus Acid this quarter, bolstered by modest to low demand from the domestic agrochemical sector. European countries reduced the consumption of Glyphosate across the region due to environmental and health concerns. Therefore, it increased the demand for other insecticides and herbicides across the region, which ultimately increased the demand for Phosphorus Acid derived agrochemicals. In addition, some other factors like freight cost and transportation hurdles also affected the prices of agrochemical products in Europe.
For the Quarter Ending March 2021
Demand for Phosphorus Acid remained narrow throughout the quarter across North America region. However, the demand from water treatment plants was observed sufficiently higher than other segments. Moreover, the demand from downstream glyphosate manufacturers remained low, as Glyphosate has been banned in several states of USA due to health and environmental concerns. In addition, in agriculture segment, demand for pesticides and herbicides remained low during this timeframe in North America.
In the Asian market, demand for Phosphorus Acid remained low, despite of plantation season in India and China. China is a leading producer and exporter of downstream Glyphosate, as it is one of the most favourable herbicides among Chinese farmers. However, ample supply activity across the region by China, deaccelerated the prices of Phosphorus Acid and its derivatives products. In the Indian market, prices remained low due to feeble demand from local agriculture segment till February end. In addition, experts anticipated that the demand may improve in Q2 after monsoon in India.
In Europe, some important decisions regarding downstream Glyphosate by several European countries affected the demand for Phosphoric Acid in this quarter. Last year, France announced regulations on using downstream Glyphosate, but later in December 2020, the French authorities announced that they will offer monetary aids to the farmers who will lessen the usage of Glyphosate. These decisions effectively reduced the consumption of Phosphorus Acid, regardless of arrival of spring season and booming agrochemicals market. The demand is further expected to go down, as several other countries are planning to stop using downstream Glyphosate.
Quarter ending result for December 2020
Major Asian countries like China and India have enough capacity for producing phosphorus acid and its feedstock PCl3. China is the leading producer of and exporter of downstream Glyphosate, which is a popular herbicide among farmers and produced using Phosphorus Acid. During Q4 2020, China faced no supply problem of Phosphorus Acid and traders saw more than enough availability of Glyphosate in the country. Buoyed by strong demand fundamentals and recovery from the COVID-19 pressure, the Indian Phosphorous Acid industry reported market gains during the quarter ending December. Prices of feedstock PCl3 scrolled down in effect of high supply from the manufacturers.
In the North American region, several natural calamities badly impacted the Phosphorous Acid market outlook during Q4. The region witnessed multiple hurricanes all over the year which impacted the Cote Blanche mines, hurricane zeta in November also left bad impact on the mine’s activity which let to shortage of phosphorus-based minerals. The industry seemed to recover from the record low prices observed during Q2 in the fourth quarter, giving a sigh of relief to the industry players. However, the quarter ended with the announcement of the Mexican agricultural department that they will completely halt the usage of derivative glyphosate by 2024. This is likely to reduce the demand of phosphorus acid from the agriculture sector in Mexico in the coming years.
Demand for phosphorus acid remained pressured from the agriculture sector in several European countries. EU found that the usage of weedkiller glyphosate is carcinogenic, and they advised the countries to mark restrictions on its usage. In October 2020, France announced restrictions on the usage of downstream glyphosate, but later in December 2020, the French government announced that they will provide financial aids to the farmers who will reduce the usage of glyphosate. Eventually these decisions will impact the usage and demand of phosphorus acid from the agriculture sector. Overall, the market outlook remained well supported by prospects turning positive for other downstream sectors amidst strong economic revival expected post the vaccine roll out.