Global Phosphoric Acid Prices Decline in Mid-October Amid Falling Feedstock Costs and Weakened Demand

In the global market, Phosphoric Acid prices saw a significant decline by mid-October. This drop in the Phosphoric Acid price in the Chinese market was primarily driven by a decrease in feedstock costs, especially Yellow Phosphorus, which lowered production expenses. Additionally, stable prices in the phosphate rock market provided further support to the overall Phosphoric Acid pricing dynamics. However, reduced production volumes, along with weakened demand in the U.S. due to hurricane-related disruptions, further contributed to the downward pressure on Phosphoric Acid prices.

In the U.S. market, Phosphoric Acid prices saw a decrement in mid-October. Trade for early October delivery anchored the low end, while the high end was framed by indications for prompt shipment. Mosaic confirmed earlier this week that its Riverview phosphate production site sustained flood damage from Hurricane Helene, further restricting product availability. Despite this, low P205 demand across the U.S. prevented any significant price reaction. Mosaic expects the plant to return to full capacity late next week. Additionally, Mosaic announced that both Potash and Phosphate operations faced challenges, which are expected to reduce production volumes and shipments in the third quarter of 2024. For Phosphate, adverse weather events, including Hurricane Francine, negatively impacted production volumes and shipments, with an estimated aggregate loss of 80-110 thousand tonnes. The U.S. manufacturing sector also encountered ongoing difficulties, with activity levels indicating deeper contraction. This overall market slowdown has led to muted demand, which further influenced Phosphoric Acid prices towards the downside despite supply constraints caused by these weather events.

In China, the price of Phosphoric Acid witnessed a notable fall this week. This decline is mainly attributed to the drop in the price of Yellow Phosphorus, a key feedstock. The price of Yellow Phosphorus decreased due to maintenance activities at some production facilities, which reduced market supply. Downstream buyers adopted a cautious, wait-and-see approach, with transactions occurring primarily at lower prices. In contrast, the phosphate rock market remained stable, with firm prices and an optimistic outlook. Despite a tight supply of Phosphoric Acid, with a shortage of spot goods, there was a slight increase in market prices.

According to ChemAnalyst's forecast, Phosphoric Acid prices are projected to remain stable to bearish in the near term. Recently, the market has experienced slight fluctuations and consolidation. A drop in the price of raw material Yellow Phosphorus has provided favorable cost support. Despite tight supply in the spot market, the Phosphoric Acid market has seen a slight rebound. However, in the short term, prices are expected to consolidate, reflecting the current balance between supply constraints and the recent cost adjustments in the market.