In December 2024, the Water Soluble Fertilizers (WSF) market in both the US and China witnessed continued bearish trends. This ongoing negative sentiment of WSF was due to export restrictions in China and low demand from the agrochemical sector. Meanwhile, in the US, suppliers were focused on selling off their existing stock of WSF to prevent the carryover of the inventories.

In China, during December 2024, the WSF market in China remained bearish due to low demand and ongoing export restrictions. The future export policies are still uncertain. Additionally, export inspections and customs clearance have been halted until at least December 31. Some producers are lobbying the government to allow shipments already promised to Ethiopia, but no new customs clearances have been reported yet.

Some market participants anticipate that export restrictions might be relaxed in January, while others think the current controls will continue until March 2025. Currently, the details and potential restrictions for the first quarter of 2025 are still uncertain.

Due to weak demand for WSF and higher export restrictions, the inland market sentiment remains negative, resulting in further price drops this month. Additionally, NPK fertilizer producers are hesitant to buy more because of rising inventory and poor sales. Purchasing for winter reserves is slow, and spot market transactions are limited.

On the supply side, phosphate producers have reduced their output due to the current downward price pressure and decline in raw material costs. In China, the production cost of Mono-Ammonium Phosphates (MAP) decreased as Ammonia prices dropped significantly by 9% and Phosphoric Acid prices fell by 0.7%.

In the US, the WSF market also experienced a bearish trend due to ample inventory levels for the downstream agrochemical sector's demand. Additionally, the production cost of Mono-Ammonium Phosphates (MAP) remained stable because the prices of key feedstocks, Phosphoric Acid and Ammonia, did not change.

Moreover, the fall applications are progressing slowly, with market participants observing that the activity levels are lower than expected for this season. Sellers are trying hard to sell off their inventories of WSF to reduce the risk of carrying it over into the next period. Although some inventory remains, new WSF shipments are expected to arrive in the first quarter of 2024. Market participants also noted that there is limited market activity and barge trading is occurring. As a result, they continued to lower their price quotes of WSF, leading to negative market sentiment in December 2024.

According to ChemAnalyst, the limited supply of WSF balances out the weak demand and affordability issues. However, many market participants predict a slight price drop, especially since phosphate prices are still high compared to other agricultural products and fertilizers. It's anticipated that WSF prices might decrease slightly in the coming weeks, but the tight supply should prevent a significant drop.