Fertilizer Demand and Exports Slump Adds to Diammonium Phosphate Market Woes in Europe and USA

During July 2023, the Diammonium Phosphate market witnessed a pessimistic outlook in both the European and North American regions. This was predominantly attributed to a decline in feedstock prices, including Ammonia and upstream Natural Gas, along with a decrease in demand from the fertilizer sector. Additionally, the European region experienced a significant downturn in energy prices by the end of July 2023, which further contributed to the prevailing price trend for Diammonium Phosphate. These multifaceted factors collectively led to a challenging market scenario, marked by lower product prices and subdued market confidence.

Diammonium Phosphate exports from the USA market were notably low during July 2023. This can be attributed to the adverse impact of high temperatures, which caused low water levels in the Mississippi River, reducing cargo arriving at the Illinois port. As a result, stockpiled inventories accumulated within the country. The prevailing inflationary pressure, as indicated by data from the US Bureau of Labor and Statistics, further aggravated the situation, prompting a reduction in export activities from the USA during this period.

Likewise, the European Region also experienced a decline in Diammonium Phosphate prices during the same period. Several key factors contributed to this depreciation, including lackluster demand for fertilizers following the conclusion of the peak sowing season in the region. Additionally, the prices of feedstock Ammonia also declined, adding further pressure to the overall product cost. Furthermore, the energy prices in the country reached their lowest point, further supporting the prevailing downward price trend for Diammonium Phosphate in the European market.

Additionally, the Industrial Producers Price Index, as reported by Eurostat, has been declining continuously for a prolonged period. In June 2023, the Index experienced a further decrease of 0.4% compared to May, and this downward trend is projected to continue. The persistently low demand for Diammonium Phosphate from the end-user segment has resulted in ample stocks available in the market. Consequently, traders have responded by lowering prices, given the surplus supply and weak demand scenario.

As per ChemAnalyst data, a shift in prices of Diammonium Phosphate is anticipated in the forthcoming months. The prices are expected to increase in both European and North American regions. Consumers are expected to make purchases for the post-harvesting season in North America. Further, increasing the price of feedstock Ammonia may also contribute towards the inclining trend of Diammonium Phosphate. Additionally, since Russia has pulled off from the grain deal, severe issues in the supply chain are anticipated leading to a significant increase in the price of Diammonium Phosphate in many European and African countries.