The first half of February witness’s stable phosphonate market in the USA. The market saw limited activity due to adequate material availability, balanced demand and weather-related restrictions. Despite logistical challenges and economic uncertainty, demand from the municipal and industrial water treatment sectors remained firm. Cost pressures eased with declining phosphorus yellow prices, but regulatory compliance under the U.S. EPA Clean Water Act Rule 2024 applied pressure on phosphonate pricing.

Domestic stock levels of phosphonate remained adequate despite minor delays in imports from Asia, particularly China. While logistical constraints persisted, the impact on overall supply was sparse. However, the broader U.S. manufacturing sector showed signs of decline, with factory output contracting for the second consecutive month, impacting the industrial water treatment chemicals market.

The cost of phosphorus yellow, a key raw material for phosphonate production, decreased, reducing cost pressure on manufacturers in China. Additionally, the upstream phosphorus trichloride market operated at much-reduced capacity due to holiday disruptions. While these factors contributed to steady phosphonate prices, rising logistics and production costs continued to create pricing challenges.

Regulatory policies, including the U.S. EPA Clean Water Act Rule 2024, have consistently driven the demand for phosphonate in water treatment. Over the past few quarters, municipalities increased procurement to comply with stricter wastewater treatment guidelines. Infrastructure investments further supported demand, offsetting the economic slowdown's impact on industrial consumption.

The U.S. manufacturing sector's downturn affected industrial demand for Phosphonate. Weak orders and policy uncertainty under Donald Trump's administration contributed to economic caution. Despite these challenges, domestic phosphonate stocks remained stable.

U.S. President Donald Trump’s decision to impose 10% tariffs on Chinese goods has been met with mixed reactions from Beijing, with the Chinese government threatening to roll out countermeasures and some Chinese businesses expressing concerns about potential disruption to their exports to the U.S. market.

Although the Chinese Ministry of Commerce pledged to contest the Trump administration's actions at the World Trade Organization, the Chinese foreign ministry underscored that trade and tariff conflicts won't resolve U.S. domestic issues and, crucially, are not advantageous to either party.

According to the ChemAnalyst database, the demand for Phosphonate in municipal and industrial water treatment is expected to improve in the upcoming months. Infrastructure projects and environmental regulations will sustain market growth. However, broader economic challenges, including manufacturing contraction and policy shifts, could impact industrial demand. Prices are likely to remain high through early 2025 as increased tariffs and inflationary pressure might impact supply chain.