Low Inventory High Demand: Two Factors Leading THPS Prices to Rise in Asia

In the first week of September 2024, Tetrakis Hydroxymethyl Phosphonium Sulfate (THPS) prices in the APAC region witnessed a notable increase. The surge was primarily driven by high demand coupled with low inventory levels across the market. The festive season, marked by the Mid-Autumn Festival in China, further fueled procurement activities, leading to increased market momentum for THPS in China.

The Mid-Autumn Festival, a significant period for many industries in the region, spurred a surge in procurement as manufacturers ramped up production to meet the heightened seasonal demand. This led to a rapid depletion of already low THPS inventories, pushing prices higher. Additionally, the demand from key sectors like water treatment and oilfield services remained robust, with industries stocking up on THPS to ensure uninterrupted operations during this crucial period. The heightened activity in oilfields, further contributed to the upward pressure on prices, as the need for THPS as a biocide intensified due to ongoing oil extraction processes.

The overall market sentiment remained positive, despite challenges in the supply chain. The supply situation for THPS was moderate, with production levels aligning with the uptick in demand. Several manufacturers maintained steady production rates, focusing on fulfilling both domestic and export requirements. However, logistical challenges, exacerbated by weather-related disruptions, led to delays in transportation and delivery, further tightening the supply of THPS in the market. These delays, along with the strong demand, the supply-demand balance kept in a delicate state, leading to an upward trajectory in THPS prices.

The increase in THPS prices during this period was not solely due to seasonal demand but also linked to broader market trends. The manufacturing sector showed signs of recovery in China, indicating an improvement in industrial activity across key economies in the region. Moreover, the global oilfield industry's expansion during this time of the year traditionally supports the demand for THPS, given its critical role in oil extraction and water treatment applications. This resurgence in demand was further amplified by the need to maintain water quality and control bacterial growth in oilfields, making THPS one of the essential chemicals during peak operational periods.

Looking ahead, market participants anticipate that THPS prices may continue their upward trend in the short term. With the Mid-Autumn Festival heightening demand and inventories remaining relatively low, the APAC market is likely to see sustained pricing pressure. However, as the festival period concludes and supply chains stabilize, a more balanced market condition may emerge. Until then, THPS prices are expected to remain firm, supported by steady demand and cautious procurement strategies adopted by industries to navigate the current market dynamics.