Stability in Phosphoric Acid Prices in early June Amid Weak Downstream Demand and Inventory Destocking

Mississippi (USA): In the global market, the price of Phosphoric Acid has shown stability in the first half of June. This stability is primarily due to weak demand from downstream markets and consistent prices of key feedstocks such as phosphate and sulfuric acid during this period. The observed downward trend in Phosphoric Acid prices is driven by market participants' efforts to destock inventories, reflecting a surplus in supply relative to demand. As a result, market participants have maintained their ex-quotation prices, contributing to overall price stability in the market. This balance between supply and demand dynamics, along with unchanged ex-quotation prices, underscores the current phase of stability in the Phosphoric Acid market.

In the US market, the price of Phosphoric Acid remained stable in the first half of June, while sulfuric acid experienced a consistent upward price trend. The downstream diammonium phosphate (DAP) market also stayed steady, reflecting balanced supply and demand. Buyer demand was moderate due to reduced stockpiling activities. However, floods in Brazil significantly impacted Phosphoric Acid export dynamics. Additionally, the USDA Secretary announced investments in domestic fertilizer projects to boost competition for US farmers. The PMI for May indicated a slight contraction. With a stable demand-supply ratio, suppliers maintained their ex-quotation prices unchanged. Demand for Phosphoric Acid in the fertilizer sector remained low, but modest growth in the food, beverage, and industrial sectors positively influenced demand for applications such as preservatives and water treatment.

In the German market, the price of Phosphoric Acid has remained notably stable this week. This stability is attributed to the consistent pricing strategies of major exporters from the Middle Eastern market, particularly Morocco. Market participants are focusing on short-term inventory buildup, which has led to a reduction in significant bulk bidding activities, thereby contributing to a downward price trend for Phosphoric Acid. Despite the observed price trends, there have been improvements in the global manufacturing environment in recent months. This positive momentum is positively influencing German producers. This steadiness in the business climate reflects a stable economic outlook among German firms.

According to ChemAnalyst, the price of Phosphoric Acid is expected to exhibit bearish momentum in the upcoming sessions. This anticipated price decrease is primarily linked to ongoing destocking of inventories due to lower demand from the downstream market. Additionally, overall underperformance in economic activities has led to reduced demand for Phosphoric Acid, which is expected to further influence its demand to the lower side.