For the Quarter Ending June 2023
North America
Prices of yellow phosphorus show a floating trend in the second quarter of 2023. In the months of April and May 2023, the prices increased by 8.2 percent because of the low inventory of stocks and increased demand from downstream industries like fertilizers, EVs, and defense. The war in Ukraine has led to a global price rise in the price of yellow phosphorus, as some researchers conclude. In the month of June 2023, the prices of yellow phosphorus moderated and slightly declined. The demand from the downstream fertilizers reduced while companies and defense remained stable due, and inventory levels remained high. Imports from Vietnam helped moderate the price as it cost USD 5450/MT in June 2023. United States. Inquiries reveal that the demand for yellow phosphorus may decline in the coming months because of the Federal Tax Credit new policy and reduced demand from the EV sector. According to Cox, at the end of June, dealers had, on average, about a 53-day supply of internal combustion vehicles in stock. The inventory runway for EVs, on the other hand, was more than double that. Overall, there were more than 92,000 electric vehicles available in the second quarter, compared to about 20,000 a year prior.
APAC
Prices of yellow phosphorus show a floating trend in the second quarter of 2023. In the month of April 2023, the prices decreased by 12.6 percent because of decreased demand from downstream industries like fertilizers, EVs, and defense. The Inflations Reduction Act 2022 has led to reduced imports to the USA from China, leading to a decrease in overseas demand for Chinese yellow phosphorus exports. In the months of May and June 2023, the prices of yellow phosphorus moderated and slightly increased. The demand from the downstream fertilizers increased while companies and defense remained stable due, and inventory levels remained high. Export performance to India and other countries improved and supported the moderation of the price as it cost USD 3192/MT in June 2023. Inflationary pressure, the economic slowdown in Europe, and the slow economic recovery in China have led to both demand and supply shocks in the second quarter of 2023. In the Vietnamese market, the prices remained volatile for the second quarter, with oscillations between FOB USD 4500/MT to USD 5000/MT.
Europe
Prices of Yellow phosphorus showed a bearish trend in the second quarter of 2023. In Belgium, the price decline is supported by a negative cost push from feedstock sulfuric acid and petroleum. The demand situation remained bleak throughout the second quarter of 2023. Strong cost pressures related to wage increases and tighter financial conditions are projected to continue weighing on business investment. Employment decelerated in the last quarter of the year amid subdued economic activity. The downstream industrial demand is expected to be subdued due to weak economic indicators and volatile energy prices.EU is expected to go into a technical recession with moderate to high inflation in Q3, which may further subdue the consumption of yellow phosphorus. Inquiries from vendors revealed that downstream industrial demand from the fertilizer industry is set to decline due to the availability of alternate forms of phosphorus for fertilizer production. Adding to Europe's woes, a slowdown in the United States and a weaker-than-expected recovery in China are also weighing on exports of downstream products.
For the Quarter Ending March 2023
North America
The Yellow Phosphorus market in the North American region has observed a mixed pricing trend in the first quarter of 2023. The market sentiments for the product were in positive territory in the first month of Q1 2023 amid increased production rates and a surge in demand from the downstream fertilizer industry. In the next two months of Q1, the market prices of Yellow Phosphorus plummeted owing to weaker demand in the downstream agriculture industry and suppressed inquiries from domestic as well as international market participants. The manufacturing activities were stable, and domestic manufacturing units operated steadily, maintaining adequate inventories of Yellow Phosphorus in the region. Also, the downstream demand from the Phosphorus Pentachloride market in EV battery manufacturing was low due to sufficient product availability and a drop in electric vehicle sales in the Asian markets.
APAC
The Yellow Phosphorus market in China showcased a mixed pricing trend in the first quarter of 2023. In the first month of Q1, the market prices increased due to a surge in demand as restocking activities were observed ahead of the Lunar New Year holidays. Although, the supply remained pressurized due to the authority’s direction to restrict power consumption. In the following two months of Q1, the demand remained sluggish in the domestic and international markets, and sufficient inventories of Yellow Phosphorus were present, leading to a disbalance in the supply and demand dynamics. Also, in March, the manufacturing PMI dropped due to a weaker demand outlook amid recession fear in the global market, the overall market prices slipped down, and bearish market sentiments prevailed in the region. The offered quotes for Yellow Phosphorus (99.9%) FOB Qingdao settled at USD 4454 per tonne at the end of Q1 2023.
Europe
The Yellow Phosphorus market in Europe exhibited mixed sentiments in the first quarter of 2023 due to uncertainties related to economic conditions as the central banks raised the interest rates to compete with the rising inflation. The demand for Yellow Phosphorus fluctuated throughout Q1 amid a weaker demand outlook from the downstream polymer and automotive industries in the region as the market consumers were reluctant for new purchases. Higher energy prices also affected the overall market of Yellow Phosphorus in the Eurozone. The manufacturing activities dropped throughout Q1 amid slower production rates and sluggish demand from domestic and international markets. The downstream Phosphorus Pentachloride market also has lagging demand for the product amid a drop in EV sales in the Asian markets.
Overall, the Yellow Phosphorus market in the North American region has observed mixed sentiments in the fourth quarter of 2022. This development has been majorly attributed to the ongoing fertilizers shortages across the regions that have been coupled with the drop in the operating rates at the facilities by the month-end. The operating rates across the value chain have impacted the market as the market players have reduced the operating rates or temporarily suspended production as a precautionary measure of the Arctic storm in the US. At the same time, Vietnamese exports were also scrutinized after the authorities limited the volumes for export. As a ripple effect, the CFR Houston was assessed at USD 5721 per tonne in December 2022.
Overall, the Yellow Phosphorus market in Asia has showcased an ambiguous trend that varies across the subregions. The Chinese market has remained on an upward trajectory, and the discussions have remained stagnant for most of the quarter; however, the offers remain higher compared to the traditional quotations. At the end of the third quarter, the Chinese authorities imposed "Energy Efficiency Management" over the Yunnan province's "largest Yellow Phosphorus producing region" till the mid of the second quarter of 2023. In response, the operating rates at the facilities dropped in between when the world observed fertilizers shortages. Therefore, the supply-demand gap has soared tremendously in the spot market. However, during the quarter's end, the Chinese authorities eased COVID restrictions improving the arbitrage with Vietnam. Major producers stated, "with the border opening, constraints on procuring the raw material has eased considerably." As a ripple effect, the FOB-Saigon discussions for Yellow Phosphorus were assessed at USD 5460 per tonne in December 2022.
In the fourth quarter of 2022, the Yellow Phosphorus market in the European region has observed a slightly bearish outlook amidst the traditional off-season. The CFR Antwerp discussions for Yellow Phosphorus were assessed as a ripple effect at USD 5878 per tonne. In terms of supply, the region has consistently remained under a constraint as the production cuts in China have diverted the inquiries traffic toward other sources. Although, a drop in the offers of shipping freights has kept the additional cost under control, further coupled with the seasonal off-trend against the dropping temperature in the European markets.
