Global Phosphoric Acid market witnesses a sluggish price trend amid slow purchasing offtakes

Texas, USA- The global market for Phosphoric Acid witnessing a slowdown, influenced by disruptions in supply and demand dynamics during H1 December 2023. The substantial price decrease is also attributed to the impact of Chinese inventory dumping in the global market following the past few months. As a result, major Phosphoric Acid producers are grappling with significant losses in production margins, operating their plants at limited capacities.

Despite the upturn in prices for downstream fertilizers like Di Ammonium Phosphate and Mono Ammonium Phosphate, the Phosphoric Acid market in the U.S. is experiencing a steady sluggish trend. Major producers attribute this to a significant increase in the cost of Phosphate Rocks, impacting profit margins domestically. Slow market offtakes and adequate product availability remain the significant reason for the feeble market sentiments. Additionally, the reduction in tariffs on Moroccan fertilizers from 19.97% to 2.12% from mid-November poses a substantial pricing threat to domestic players. Industry reports suggest that the surge in Phosphate rock prices is anticipated to decline, which may further slash the production cost of Phosphoric Acid.

In the European market, this price reduction during H1 December 2023 is linked to a decline in the end-use Food and Beverage sectors, impacting Phosphoric Acid prices. Although there is an increase in the Purchasing Managers' Index (PMI), indicating growth in industrial activities, the slowing trend in New Orders remains evident. Overall demand for Phosphoric Acid in the downstream market is moderate to lower, especially in its use as a preservative and pH regulator in the Surfactants and Water Treatment sectors. The European market sources Phosphoric Acid from the Middle East, particularly Israel and Morocco, and the price decline is influenced by the reduced prices in the significant exporting nations.

According to predictions by Chem Analyst, Phosphoric Acid prices are expected to either remain stable to bearish trend. This is attributed to the expectations of global underperformance in the fertilizer sector and the anticipation of Phosphate rock prices stabilizing level, along with an expectation of the end of the Chinese dumping effect. The decreased demand for Phosphoric Acid in both the U.S. and European markets is a result of reduced fertilizer needs downstream. Industries like food, preservatives, and surfactants are also experiencing diminished demand. Additionally, industrial players are hesitant to ramp up production due to lower pricing pressure and increased production costs. Examination of price fluctuations of Phosphoric Acid indicates a downward trend, leading suppliers to exercise caution in accumulating large inventories due to limited bidding activities.