Despite internal challenges, China's Diammonium Phosphate (DAP) market has exhibited relative stability over the past two months. This stability was attributed primarily to government restrictions on DAP exports. While domestic prices remained constant, a significant increase in market activity emerged post-holiday season, leading to a slight rise in buying interest during March. However, these restrictions continued to limit DAP exports, leading to a surplus in the Chinese domestic market. This surplus discouraged significant consumer sentiments as customs clearance for exports remained halted until mid-March.

After the holiday break, the market activity in China has witnessed a clear rebound leading to an opening of more opportunities during this timeframe. However, because of government restrictions that continue to limit DAP exports, more goods were available on the local market, discouraging traders from making large changes because customs clearance for DAP exports remains blocked until at least the end of mid-March. Henceforth, Despite the glimmer of hope, the prices for DAP remained unchanged in China to settle at USD 560/MT, FOB Qingdao during the week ending 22nd March 2024.

Nevertheless, according to industry reports, China has resumed exporting DAP after the second half of March. However, sales volumes were insufficient to alleviate the supply deficit that has plagued the global market since Chinese export restrictions were tightened in November 2023. While China maintains restrictions on exports, small shipments totaling 14,000-16,000 tons are reportedly being sent to Thailand in late March/early April. This limited supply suggests China is cautiously resuming DAP exports, potentially in anticipation of announcing its 2024 export quota. Consequently, the processed phosphate market saw China emerge with exports this week, albeit in limited volumes, at a significantly cheaper price than recent transactions for the Thailand market with Middle Eastern origin.

As per ChemAnalyst, the DAP prices in China are foreseen to surge in the upcoming month as the Chinese exports of processed phosphates will begin in earnest in late April or early May if the government does not extend restrictions. Moreover, the resumption of Government restrictions on DAP exports from China could increase the purchasing levels from the overseas market. Moreover, at the beginning of the new quarter, the demand for DAP from downstream agriculture may surge and the consumption levels are anticipated to improve from fertilizer producers due to secondary applications in the agriculture sector. Until China's exports pick up, which might take until well into the second quarter, quick DAP availability around the world will be constrained.