For the Quarter Ending September 2024
North America
In Q3 2024, the North American market for phosphorus pentachloride faced a significant downturn, with prices experiencing a sharp decline compared to the same period last year. This drop was driven by several factors, including weak demand, high inventory levels, and sluggish purchasing activity. Additionally, an increase in imports and limited cost support from upstream sectors further intensified the downward pressure, reinforcing the overall negative sentiment in the market.
In the U.S., which witnessed the most significant price fluctuations, the trend mirrored the broader North American landscape, with prices beginning to decline early in the quarter due to ongoing challenges. This downward momentum continued throughout the latter half of the quarter, reflecting a sustained decrease in pricing.
By the end of Q3 2024, prices for phosphorus pentachloride had settled at lower levels, highlighting a challenging market environment characterized by oversupply and weak demand. The pricing trend for phosphorus pentachloride in North America during this period remained consistently negative, shaped by an excess of supply, lackluster market demand, and difficult conditions affecting both upstream and downstream sectors.
APAC
In Q3 2024, Phosphorus Pentachloride market noted mixed trends with China facing most volatility. In July, the prices of Phosphorus Pentachloride in the Chinese domestic market saw an uptick, driven by increased cost pressures from upstream raw materials, particularly yellow phosphorus. Despite this rise, demand from the downstream battery manufacturing sector has remained lackluster amid sluggish consumption patterns. August brought further price increases for Phosphorus Pentachloride, as firm support from both the yellow phosphorus and Phosphorus Trichloride markets persisted. However, demand from the battery manufacturing sector continued to falter, indicating an ongoing challenge for this segment. The new energy vehicle market underperformed expectations, with sales of pure electric vehicles rising by just 11% year-on-year during the first half of the year, significantly lagging behind the impressive 88% growth rate in plug-in hybrid vehicle sales. In September, the prices of Phosphorus Pentachloride experienced a downturn in the Chinese domestic market due to weak consumer demand. This decline was exacerbated by diminished support from the upstream yellow phosphorus and phosphorus trichloride markets. The persistent weakness in demand from the downstream battery manufacturing sector further compounded the situation, reflecting sluggish consumption trends.
Europe
In Q3 2024, the European market for phosphorus pentachloride experienced a continued decline in prices, reflecting a bearish sentiment influenced by several key factors. Oversupply issues, coupled with weak demand from both Asian and North American markets, significantly contributed to the downward pressure on prices. Additionally, the absence of substantial cost support from upstream sectors exacerbated the pricing challenges for phosphorus pentachloride throughout the quarter.
The challenging market environment was characterized by elevated inventory levels and sluggish consumer demand, further intensifying the downward pricing trend. European producers encountered additional difficulties, including rising production costs, diminished demand from downstream industries, and deteriorating economic conditions, all of which compounded the tough circumstances within the phosphorus pentachloride market. Notably, countries like Belgium and Germany experienced the most significant price fluctuations in the region. The steep year-on-year decline in prices underscores the difficult market conditions, while the quarter-on-quarter changes, along with the marked differences between the first and second halves of the quarter, highlight the persistent downward trajectory for phosphorus pentachloride prices.
For the Quarter Ending June 2024
North America
In Q2 2024, the North American market for Phosphorus Pentachloride saw mixed price trends. Price increases were primarily driven by rising shipping costs and unseasonal surges in ocean freight demand, compounded by logistical bottlenecks and increased restocking cycles from major importers, which strained the container market. The consumer market was mostly dry as the overall demand this quarter was very tepid.
Higher freight charges, exacerbated by shipping capacity constraints and disruptions in major trade routes, significantly impacted the cost structure, leading to elevated import costs for phosphorus-based raw materials. In the USA, where price movements were most pronounced, trends reflected a complex interplay of steady downstream demand, particularly from the chemical and industrial sectors, and an oversupplied domestic market. The EV sales were also underwhelming, which led to higher uncertainty in the battery industry and for chemicals used in the batteries.
Despite stable downstream inquiries, the market faced a contrast between declining new purchase orders and rising freight and import costs, which collectively pushed prices higher. Overall, the pricing environment remained stable with a slight upward trend, influenced by logistical challenges and shifting demand dynamics, particularly within the North American chemical sector, amidst broader macroeconomic pressures.
APAC
In Q2 2024, the pricing environment for Phosphorus Pentachloride in the APAC region exhibited a consistent downward trend, driven by several impactful factors. This quarter, the market experienced weakened consumer demand coupled with ample material availability, leading to decreased procurement activities. This, in turn, resulted in lower production costs as the support from upstream raw materials like Phosphorus Trichloride and Yellow Phosphorus diminished. Concurrently, rising freight rates and geopolitical tensions further compounded the downward pressure on prices. Focusing on China, the country experienced the most significant price changes. The overall trend in China was characterized by bearish market sentiments, with a notable 14% decline from the same quarter last year and a 12% drop from the previous quarter in 2024. This contraction was exacerbated by seasonality, as typical demand cycles waned and consumer inquiries fell. The first half of the quarter saw a slight stabilization in prices compared to the second half, with a marginal decrease of 1%, illustrating the pervasive negative sentiment. The latest quarter-ending price settled at USD 880/MT for PCl5 Battery Grade Contract FOB Shandong, reflecting the challenging market conditions. Overall, the pricing environment has been negative, influenced by reduced consumption rates, lower production costs, and subdued industrial activity. This negative trend, coupled with cautious procurement behavior and ample supply, underscores the prevailing bearish outlook for Phosphorus Pentachloride in the APAC region, particularly in China.
Europe
In Q2 2024, the Phosphorus Pentachloride market in Europe exhibited a largely stable pricing environment. The quarter saw balanced supply and demand dynamics, supported by consistent production rates and stable upstream costs for key raw materials such as Phosphorus Trichloride and Yellow Phosphorus. Logistical challenges, such as rising freight charges and congestion in major shipping routes, did not significantly disrupt the market. Demand from downstream sectors, particularly the electric vehicle industry, remained subdued due to reduced subsidies and economic uncertainties affecting consumer spending. Moreover, the slowdown in EV sales also led to weak procurement for the product. In Belgium, Phosphorus Trichloride prices saw some fluctuations but generally remained stable over the second quarter of 2024. Throughout the period, price trends remained stable, with no significant percentage change between the first and second halves of the quarter, indicating steady market sentiment. Overall, the market has maintained a stable pricing environment with a slight upward trend, driven by logistical challenges and evolving demand dynamics in the European electric vehicle sector, despite broader macroeconomic pressures.
For the Quarter Ending March 2024
North America
In the first quarter of 2024, the North American Phosphorus Pentachloride market continued to encounter challenges. The supply of Phosphorus Pentachloride in the region remained high, with sluggish consumption and heavy procurement levels from previous periods. The domestic automotive industry's demand for Phosphorus Pentachloride stayed low, reflecting market participants' cautious approach.
Major manufacturers focused on fulfilling long-term orders, resulting in lower domestic inventories due to slow replenishments. An impactful factor on the market was the growing competition from Chinese electric vehicle (EV) manufacturers, which affected the profitability of US-based EV companies, adding further challenges. Additionally, the supply chain constraint due to the Israel-Hamas war and drought in the Panama Canal impacted global trade, causing delays and increased freight charges.
Moreover, high-interest rates increased the cost of financing significant purchases, slowing down the adoption of electric vehicles globally. Despite inflation in other consumer goods, the uptake of electric vehicles remained slower than anticipated. This slower adoption contributed to the overall bearish sentiment in the North American Phosphorus Pentachloride market.
APAC
Phosphorus Pentachloride pricing in the APAC region for Q1 2024 experienced a significant decrease. Several factors have influenced market prices during this quarter. In general, the market has been characterized by a negative sentiment, with prices showing a consistent downward trend.
China, in particular, has witnessed the maximum price changes. The overall trends in China can be attributed to various factors, including weak consumer demand, an oversupply situation, and low consumption rates.
Additionally, the cost pressure from upstream raw materials, such as Yellow Phosphorus and Phosphorus Trichloride, has further contributed to the decrease in prices. In terms of seasonality, the first quarter of 2024 has shown a decline compared to the same quarter last year, with prices recording a decrease of 9%. Furthermore, there has been a significant decrease of 13% in prices from the previous quarter in 2024.
The price comparison between the first and second half of the quarter indicates a slight decrease of 1%. This suggests that the downward trend in prices has been consistent throughout the quarter. As the quarter comes to an end, the latest price for Phosphorus Pentachloride in China stood at USD 960/MT of Phosphorus Pentachloride Battery Grade Contract FOB Shandong.
Europe
During the first quarter of 2024, the Phosphorus Pentachloride market in Europe encountered various obstacles that significantly affected pricing dynamics. These challenges resembled those faced in the previous quarter, with oversupply playing a pivotal role in reducing demand and subsequently lowering prices. The persistent sluggish demand from the lithium-ion battery manufacturing sector persisted, with consumers remaining cautious amid price declines.
Moreover, the dominance of the Chinese market in both Europe and the United States contributed to the overall bearish sentiment in the market. Chinese electric vehicle (EV) manufacturers, such as BYD, continued to experience substantial sales growth, surpassing Tesla as the leading global electric carmaker. This heightened competition further impacted the profitability of European-based EV companies. Nevertheless, Germany witnessed a notable exception, with a significant surge in sales of battery electric cars, boasting a remarkable growth rate of 75.5%.
However, the intense pricing competition among European, US, and Chinese EV manufacturers persisted. Throughout this challenging period, the market faced several shutdowns, resulting in disruptions that directly influenced prices. Despite these challenges, there were some minor developments in market transactions for Phosphorus Pentachloride in Belgium during the quarter.
For the Quarter Ending December 2023
North America
In the fourth quarter of 2023, the USA's Phosphorus Pentachloride market displayed a mixture of sentiments. In the initial two months, prices witnessed a significant decline due to a gloomy demand outlook, particularly in downstream sectors like battery manufacturing and other end-use industries, where consumer inquiries were limited. Market observers highlighted low domestic inventories stemming from weak consumer demand, and the influx of low-priced imports exacerbated the overall price decrease.
However, come December, there was a regional upturn in prices, propelled by the introduction of higher-priced imports and a general increase in demand. Furthermore, an improvement in consumer confidence in the US suggested optimism regarding future business conditions. Despite these positive indicators, the Phosphorus Pentachloride market grappled with consistently low demand.
Battery manufacturing firms, despite maintaining substantial inventories, hesitated in procurement due to the ongoing price decline. Additionally, the region faced challenges like high inflation, increased interest rates, and recessionary pressures, which had a continuous impact on businesses. Consequently, the consumer market adopted a notably cautious approach in the last month of Q4 2023.
APAC
During Q4 2023, the market sentiments for Phosphorus Pentachloride (PCl5) in the APAC region were mostly bearish due to low demand. The supply was moderate, and production costs declined slightly due to low upstream Yellow Phosphorus and feedstock Phosphorus Trichloride costs. The demand from downstream industries like dyes and pharmaceuticals was low to moderate, with inquiries slowing down. The market sentiments are anticipated to rebound in the region, with a moderate demand from downstream industries. China saw the most significant changes in prices, with a drop in prices due to low demand and high inventories of the product in the domestic market. The offered quotes for Phosphorus Pentachloride Battery Grade Contract FOB Shandong settled at USD 928/MT in the week ending on November 17th, 2023. The overall market sentiments are expected to remain bullish in the region. The quarter saw a 23% YoY change in prices and a -3% change from the previous quarter. The price percentage comparison of the first and second half of the quarter in China was -15%, indicating a decline in prices in the latter half. The current quarter-ending price of PCl5 Battery Grade Contract FOB Shandong in China is USD 928/MT.
Europe
In the fourth quarter of 2023, the Phosphorus Pentachloride market in the USA displayed a combination of positive and negative sentiments. In the initial two months, phosphorus pentachloride prices sharply declined due to a pessimistic demand outlook, particularly in downstream sectors like battery manufacturing and other end-use industries, where consumer inquiries were limited. Market participants observed low domestic inventories attributed to weak consumer demand, and the influx of low-priced imports exacerbated the overall drop in product prices. However, by December, there was a regional price improvement driven by the importation of higher-priced goods and a general rise in demand. Notably, increased consumer confidence in the US signaled optimism for future business conditions. Despite these positive indicators, the Phosphorus Pentachloride market continued to grapple with persistent low demand, with battery manufacturing firms maintaining significant inventories but hesitating in procurement due to declining prices. The region also faced challenges such as high inflation, elevated interest rates, and recessionary pressures, which consistently impacted businesses. Consequently, in the last month of Q4 2023, the consumer market exhibited a prevalent cautious approach.
