Prices for Tetrakis Hydroxymethyl Phosphonium Sulfate (THPS) remained under pressure during mid-December 2024, as weak downstream demand and insufficient cost support from feedstock continued to weigh on the global THPS market. Persistent bearish sentiment and high supply further exacerbated market challenges, with limited recovery prospects visible in the short term.

In Asia, particularly China, the THPS market has been struggling due to tepid demand from key downstream sectors such as water treatment, textiles, and paint. The water treatment industry, a major consumer of THPS, has reported sluggish activity amid delayed industrial projects and limited seasonal operations. Seasonal slowdowns in construction activities in northern China, exacerbated by colder weather, have significantly dampened the demand for other downstream like paint and coating, leaving producers with elevated inventory levels.

Chinese manufacturers have maintained steady production rates to manage overhead costs, which has contributed to an oversupplied market. Despite declining feedstock Phosphorus Trichloride prices, stable formaldehyde costs offered limited cost relief. Producers were forced to adopt aggressive destocking strategies, including price discounts, to encourage transactions. Additionally, a recent report from the China Chemical Industry Association indicated a 5.8% year-on-year drop in industrial chemical profitability, highlighting broader sectoral challenges that are affecting THPS production and pricing.

In India, THPS prices followed a similar downward trend, reflecting weak demand across downstream sectors. The water treatment and textile industries reported limited procurement, compounded by a sluggish real estate sector impacted by prolonged monsoonal delays. Construction activities remained subdued, reducing the demand for paints and coatings, further contributing to the bearish sentiment in THPS market. Indian manufacturers, while grappling with oversupply, have also faced challenges in exporting surplus stock due to weak global demand.

Operating rates remained low, reflecting ongoing efforts to clear inventories and mitigate losses. The subdued domestic and international market sentiment left THPS producers with limited pricing power and bleak recovery prospects. Manufacturers have reported limited inquiries, with buyers adopting a wait-and-see approach.

In the USA, the THPS market also experienced declining prices, driven by weak demand from water treatment, textiles, and construction sectors. Reduced industrial output and limited seasonal demand for water treatment chemicals contributed to the bearish sentiment. High inventory levels, coupled with cautious procurement strategies from downstream industries, underscored the ongoing challenges. Imports from Asian producers added to the oversupply, intensifying competition and sustaining downward pressure on prices.

As per ChemAnalyst, THPS prices are expected to face continued downward pressure in the coming weeks. The urgency among manufacturers to clear inventories before year-end, coupled with persistent weak demand amid festival seasons that usually pause industrial activities, will likely weigh on prices. Broader challenges in the water treatment, construction, and textile sectors, including reduced funding for infrastructure and housing projects, are expected to keep downstream demand muted.