Chinese Yellow Phosphorus Market Persistent in Sluggish Trajectory

Singapore: Since the second half of June, the Yellow Phosphorus dynamics in the Chinese domestic market observing a steep downward trend in the offered quotations from the producers. The offers witnessed a drop of more than (-10%) in 4 weeks. The market trend is reciprocating despite the higher cost support from the upstream Phosphate rock, which observes an increment of USD 15-25 per tonne to USD 155-165 per tonne in the last week of June. A market source informed that the mining activities were operating at optimum levels after the COVID-related shutdown in northeast China, although the demand remained silent in the domestic market.

Currently, the Chinese Yellow Phosphorus market is relatively complex as the June exports were restricted against the anticipated surge. The downstream producers and traders are keener to approach wait-and-see sentiments in the Chinese domestic market. The inquiries remained limited, leading to rough negotiations with lower prices for large quantities.

The speculation on removing restrictions for exporting phosphate-based fertilizers to overseas markets has gripped the market sentiments tightly. Several Yellow Phosphorus domestic producers have received the July deliveries' pre-orders. In contrast, the Hebei mining enterprise mainly supplies to shareholders and customers with no external supply for the time being. At the same time, the demand for downstream Phosphoric Acid was healthy despite the slight drop in the offers amidst the strong wait-and-see sentiment regarding the resumption of Phosphate-based fertilizers exports.

As per ChemAnalyst pricing intelligence, the Yellow Phosphorus market in the Chinese domestic market will observe a sudden and strong rebound in the market dynamics. According to business society's Phosphorus ore data division, the domestic Phosphorus market will stagger mostly on high levels in the upcoming term as the fertilizers shortage become a global phenomenon after the Russia-Ukraine war broke out in the eastern European region. Therefore, it is anticipated that the prices of Yellow Phosphorus will stagger downward for a short-term outlook, followed by a sudden rebound in the complete value chain.