Amid Fertilizer Exports Restriction, Korean Phosphoric Acid Market Shows Sluggish Trend

Phosphoric Acid market sentiment remained bearish amid high sulphuric acid prices. The announcement of fertilizer export restrictions from China and the Japanese market is easing global Phosphoric Acid availability. Exports are projected to be higher within the domestic market as the drop in Phosphoric Acid prices in South Korea is more than offset by higher exports from Brazil and Thailand. Stocks are estimated lower as growth in the domestic market consumption falls short of the rise in production. Concerning key exporters, China is anticipated to import less in favor of drawing down stocks for its consumption, reduced production in South Korea is expected to increase inventories, and Thailand is expected to draw down supplies to support higher exports driven by weak market demand.

Compared to the preceding time, the Phosphoric Acid based fertilizer market at the downstream terminal has decreased, giving stock support for phosphate rock from the bottom to the top. Additionally, the supply side will keep deteriorating.

South Korea's unionized cargo truck drivers began a nationwide strike on 17 November 2022, potentially disrupting the country's petrochemical production and coordination operations. The South Korean government this week offered a three-year extension to the system for the containers and cement sectors. Still, it declined to extend the benefits to other industries, such as fuel and steel.

The significant depreciation in the South Korean currency won (W) has been aggravating inflationary pressures on Asia's fourth-largest economy, which relies heavily on energy imports. Since the beginning of the year, the Won has lost more than 10% of its value relative to the US dollar. Future domestic economic growth is anticipated to deteriorate due to the slowdown in the global economy and the rise in interest rates.

The downstream demand for Phosphoric Acid has been weak this week, and the market trading atmosphere was calm, the Phosphoric Acid plant was in a wait-and-see mindset, and the downstream just bought on. Downstream procurement stood cautious and terminal demand was weak. The Phosphoric Acid market is expected to decline in the short term.