German Phosphonate Price Rise Amidst Supply-Demand Adjustments

Hamburg (Germany): The Phosphonate market in Germany demonstrated improvement in April 2024, backed by better supply and demand fundamentals. According to industry experts, the business climate in Germany's chemical industry showed improvement, with the index rising to -6.0 points from -10.1 points in March. Companies assessed their current business situation slightly better compared to March. Business expectations also brightened significantly in the chemical manufacturing sector, including Phosphonate.

Market participants indicate that the chemical industry feels somewhat more confident about the upcoming months. However, the demand situation in the industry remains tense, with nearly half of the companies reporting insufficient orders for chemicals such as Phosphonate. This figure rose to 46.6% in April from 40.6% in January. Nonetheless, chemical companies anticipate a higher number of orders from overseas, and some companies plan to increase their sales prices for the first time since January 2023. Additionally, more companies are planning to expand production in the coming months.

The demand for Phosphonate noted slight improvement from downstream industries; however, the figures still suggest underperformance in the chemical industry. The supply was usual, while purchases were mostly on a need basis. The Phosphonate supply met consumer demand adequately, and imports remained low.

However, industries, particularly manufacturing, experienced continued deterioration, with Germany leading the decline. In terms of supply, the ocean container market has adapted to a new pattern that circumvents the Red Sea due to ongoing Houthi attacks. Although the considerable backlogs, congestion, and equipment shortages witnessed during the initial weeks of the crisis have alleviated, adjustments have led to some moderate yet persistent disruptions.

Demand for Phosphonate from downstream sectors like textiles, water treatment, paper, and pulp remained sluggish both domestically and in other European markets. Purchases of Phosphonate were mainly driven by immediate needs, and domestic inventories were sufficient to meet current demand in the region. Industry experts noted that most consumer markets were hesitant to make new purchases of Phosphonate, and procurement from other European nations remained subdued due to poor economic growth across many countries in the Eurozone.

Weak demand for chemicals such as Phosphonate and declining prices of paper have become common challenges for these businesses. Similarly, the recovered fiber market in Europe is facing familiar difficulties observed in 2023, with recyclers experiencing low demand from mills and decreased collection rates.

According to the ChemAnalyst database, the prices of Phosphonate are anticipated to increase again in the upcoming weeks based on presumed improvements in market sentiments and increased consumption in the downstream consumer markets of Phosphonate.