For the Quarter Ending June 2023
As per export data of China with USA and CANADA, the number had seen a downtrend, indicating weak demand in the State of America. Both countries had been focusing on increasing their domestic manufacturing and ensuring their cash inflows. Hence, the estimated price of Phosphorus pentachloride had also been following the bearish pattern of the upstream phosphorus trichloride market. But according to the market participants, the downtrend is bound to stop sooner. As per the Chemanalyst database, strong demand for EVs and local manufacturing had been projected to boost the market growth of phosphorus pentachloride chemical used in EV batteries. Which further pushed the domestic competition. Moreover, some global giants in the EV industry had been planning to invest in the USA, such as Capchem, had announced a plan to build a $120 million dollar electrolyte plant in southern Ohio; Soulbrain had been building a $75 dollar million electrolyte plant in Indiana to serve a nearby battery factory. After phosphorus trichloride, phosphorus pentachloride is the largest chemical market for elemental phosphorus. Furthermore, the Phosphorus pentachloride market in North America is regarded as the second most significant area for the growth of this market. North America had been dominating the Lithium Hexafluorophosphate market, followed by Europe. The need for lithium Hexafluorophosphate is dominated by countries like USA and Canada because end customers in these regions chose four-wheeled vehicles and because these nations have thriving automotive industries.
APAC
The market price of Phosphorus pentachloride had dropped slightly at the start of the second quarter of 2023 in the Asian market due to weakened support from the upstream phosphorus trichloride market and modifications in government regulations. Although, another feedstock, Chlorine prices, have been steady throughout the quarter in China. At the same time, the inflows of new orders from the downstream agricultural industries remained gloomy in the region. Hence, that resulted in a partial burnout in demand for the upstream phosphorus trichloride market, which further reduced the cost of production. The market transactions were also average as the enthusiasm of the terminal firm to enter the market was not strong, which dragged down the confidence of the industry. In June 2023, the manufacturing sector had seen a contraction indicated by the PMI number 49 in April due to a slowdown in factory activity since January amid an ongoing property decent and global recession. As per market participants, the demand had been light in that region while consistent import of the product had been maintained and export remained poor, and the supply has been steady. The supply of the product had been stable, but amid the low frequency of the downstream consumer inquiries in the battery manufacturing sector, the overall market sentiments had been weak in the time frame. Therefore, prices of phosphorus pentachloride in FOB China had been assessed at USD 1041/tonne with a quarter-on-quarter decrement of 3.16% during June 2023. Another reason had been contributed to the demand for phosphorus pentachloride was the increasing demand for lithium hexafluorophosphate used in electric devices and government attention to pollution control. However, China is the leading producer of this chemical, with numerous plants. Furthermore, Japan, Taiwan, and South Korea are the top countries involved in the production of Lithium Hexafluorophosphate.
Europe
Since the European economy is still in the recovery stage from recession and weakened demand amid the global economic downturn, chemical exports from Vietnam to the European continents have shown signs of slowing down in the first three and half months of the year 2023. The export turnover of basic chemicals had only reached 930 million USD, down 10.9% year-on-year, due to weak global demand. Chemical export value ranks 12th in total export items of Vietnam. With a mixed scenario, the prices of yellow phosphorus in Europe had been constant during the month of June 2023 due to the muted market sentiments. While in the Chinese market, there has been a decline in the prices further from last year due to the withdrawal of the product ban from the government. This resulted in an increase in competition domestically and hence a reduction in prices. However, Phosphorus pentachloride usage in the production of chemicals such as Lithium hexafluorophosphate and rapid expansion of the global Electric Vehicle (EV) industry has been driving demand for the global phosphorus trichloride market.
For the Quarter Ending March 2023
North America
In the first quarter of 2023, the market of Phosphorus Pentachloride plunged in the North American market. In January, the market prices dropped amidst restricted market activities in the Asian region, and the regional market competition dropped amongst the downstream EV manufacturers. In February, the prices tumbled further amidst a wait-and-see consumer market attitude in the region as the Asian market participants reported a drop in electric vehicle sales and built-up inventories. Whereas in March, due to a decline in new orders and slipping export sales, the market prices of Phosphorus Pentachloride slipped down in the region. The demand outlook from the downstream dyes manufacturing and chemical synthesis industry remained weaker in the region in this period.
APAC
The Phosphorus Pentachloride prices observed a bearish pricing trend in the Chinese domestic region in the first quarter of 2023. Amidst restricted market activities due to the Lunar New Year holidays, the market remained on a bearish trajectory in January. In addition, the majority of the first term was focused on restocking practices. In February, the spot market offers dropped due to a weaker demand outlook amid looming uncertainties regarding the electric vehicle manufacturing sector, and new purchase orders were slow. In March, due to weaker cost support from the upstream Phosphorus Trichloride, the prices of the product dropped further. The demand outlook remained moderate in the region amidst sluggish demand from the downstream battery manufacturing industries. Thus, the prices of Phosphorus Pentachloride Battery Grade Contract FOB Shandong settled at USD 1075 per tonne at the end of Q1 2023.
Europe
In the first quarter of 2023, the overall market prices of Phosphorus Pentachloride rode the downward trajectory in the Belgian domestic market. In January 2023, the offered quotes plunged, moving identically to the Asian market. In addition, the rising inflation and energy prices kept the operating rates restricted. In February, the prices dropped due to weaker demand from the dyes manufacturing and chemical synthesis industry, the Asian market players leading to restricted exports of the product, and uncertainties regarding the economy. In March, the prices dropped further due to lacking market competitiveness from the Asian markets and the wait-and-see consumer market sentiments across the globe.
Overall, the Phosphorus Pentachloride market in the North American market has fluctuated within range despite persisting on an upward trajectory. That has been further coupled with the reduced operations at the manufacturing facilities impacting the supply outlook in the domestic market. Although to sustain the netbacks efficiently, producers adjusted the operating rates in the domestic market. In addition, the demand has dropped in the latter half, further coupled with a blizzard storm by the quarter end, enforcing a negative outlook for Phosphorus Pentachloride by the quarter's end. In response, the FD Vancouver discussion for Phosphorus Pentachloride was settled at USD 1827 per tonne during the week ending December 2022.
In the fourth quarter of 2022, the Phosphorus Pentachloride market in the Asia Pacific region observed a mixed attitude depending upon the subregions. The Chinese market witnessed a sharp plunge in the offers of Phosphorus Pentachloride amidst the inadequate demand to sustain the supply-demand balance in the domestic market. The higher offers of feedstock and ample inventories have affirmed a bearish outlook in the domestic market as the wait-and-see attitude in the domestic market has soared. As a ripple effect, the FOB Shandong discussions for Phosphorus pentachloride were assessed at USD 1248 per tonne during the quarter ending December 2022. Whereas the offers in the Southeast Asian market remained fluctuating as the majority volumes of the feedstock Yellow Phosphorus has diverted towards the fertilizers industry.
The Phosphorus Pentachloride market in the European markets has witnessed mixed sentiments during the fourth quarter of 2022. The market obtained a substantial gain in October, and the domestic outlook has sustained adequate recovery against the losses that occurred during the summer break. Although the gains were short-lived amidst the rising inflation and interest rates, consumer sentiments were more conservative than anticipated. At the same time, the insufficient import of Yellow Phosphorus has pressurized the supply outlook considerably. The stance of the European Union over the Russian energy supplies has levied a considerable impact on the operating cost of manufacturing. In response, several producers and downstream players adjusted the operating rates to sustain the supply-demand dynamics of Phosphorus Pentachloride in the volatile environment across the region. As a ripple effect, the FD Genoa discussions for Phosphorus Pentachoride were settled at USD 2078 per tonne in December 2022.
