Hamburg, Germany: Recent analysis shows, European Phosphonate prices have stabilized in early November as the supply and demand dynamics for Phosphonate have counterbalanced each other. In late October to early November, demand for water treatment chemicals, including Phosphonates, in Europe has shown steady yet subdued growth, largely driven by the seasonal shift toward increased municipal and industrial water treatment needs. With colder temperatures setting in, utilities and industries are preparing for heightened water treatment activities, including increased use of Phosphonates, disinfectants, biocides, and corrosion inhibitors to ensure efficient operation during the winter months.

However, economic uncertainties, high energy prices, and restrained industrial production are limiting significant growth in water treatment chemical purchases, including Phosphonates. In terms of specific chemicals, products like Phosphonates, chlorination agents, and flocculants are experiencing stable demand, although inventory levels remain slightly elevated due to weaker-than-expected orders in earlier quarters.

In recent times, the European container markets faced bearish sentiment throughout the third quarter as front-haul spot rates sharply declined following an early peak season rush, largely driven by ongoing diversions from the Red Sea. The premature start of peak season in Asia-Europe routes led market participants to secure cargoes earlier than usual. Extended transit times, caused by Red Sea diversions, prompted shippers to front-load shipments in preparation for logistical hurdles, including limited container equipment, irregular weather conditions, and port congestion. This has caused the chemical inventories in the European markets to rise up significantly.

For the past few weeks, Ports in Hamburg and Felixstowe are still dealing with some congestion, and some vessel bunching persists in Shanghai, though waits at Qingdao and Ningbo have decreased. Anticipation is building for an early start to the pre-Lunar New Year demand increase in November, as European shippers account for extended transit times around the Cape of Good Hope. Consequently, Phosphonate ATMP prices CFR Hamburg were quoted at USD 1080/MT for the week ending November 1, 2024.

Demand for Phosphonate has remained particularly low, with limited new orders reported, largely due to sluggish economic growth and reduced consumer spending. Domestic supply has been sufficient to meet local needs, while the European market faces additional pressures from delayed import shipments, further adding to the supply surplus and weighing on prices. This challenging environment is impacting Phosphonate producers and distributors in the region. Furthermore, Germany’s manufacturing activities improved slightly in October in comparison of September. However, the mood in German industry stayed downcast in October, but there are signs that an economic bottom may have been reached.

As per the ChemAnalyst analysis, the prices of Phosphonate are expected to remain stable in the upcoming weeks on the back of anticipated balance between demand-supply fundamentals.