The US phosphorus pentachloride market has noted stability in the first half of March 2025 after experiencing a declining trend over the past months. The demand for phosphorus pentachloride has remained moderate due to heightened competition from other markets and falling battery raw material prices. Consumers have adopted a wait-and-see attitude due to high volatility in the phosphorus pentachloride market.

Most of the phosphorus pentachloride arrives from Europe, primarily from Germany, Switzerland, and the Netherlands. The producers of phosphorus pentachloride have been facing persistent challenges over the past few quarters. High energy and raw materials costs have exerted significant pressure on European phosphorus pentachloride manufacturing firms.

In February 2025 itself, electricity prices across Europe noted a significant rise due to higher natural gas prices and a decrease in wind power generation. Though demand has declined as average temperatures have increased, electricity prices have gained considerable upward momentum.

The US battery market continues to advance rapidly as demand improves continuously while the prices are following the opposite trend. The recent announcement of tariffs on Chinese goods has opened numerous pathways for domestic battery manufacturers to enter the market and produce high-quality batteries. However, uncertainties prevail in the domestic battery market as a preliminary decision regarding anti-subsidy and anti-dumping duty on Chinese components came true. On 12th March, the US House of Representatives passed a bill to prevent imports of China-made batteries.

Mainly, six battery producers from China — Contemporary Amperex Technology Co., Ltd., BYD Co., Ltd., Envision Energy Co., Ltd., EVE Energy Co., Ltd., Haichen Energy Storage Technology Co., Ltd., and Guoxuan High-tech Power Energy Co., Ltd. — are the primary target of this legislation. The House stated that, as the reliance on battery technology increases, the US must ensure that batteries don’t  come from aggressive nations.

This legislation emphasizes strengthening the domestic production and not giving the Chinese Communist Party any possibility of destabilizing national security. China’s dominant position in the EV sector has become a new point of geopolitical traction. China manufactures about 80% of the worldwide battery supply and approximately 75% of lithium-ion batteries, leading to heavy dependence on Chinese vendors, which has resulted in phosphorus pentachloride based materials being imported rather than being produced and consumed domestically.

According to the ChemAnalyst pricing team, the phosphorus pentachloride market is poised to showcase resilience in the upcoming weeks with rising interest in technology, investments, and growing Energy Storage System (ESS) demand. Additionally, economies of scale, collaboration within the supply chain, and optimized production will be the main focus areas that are foreseen to stabilize the phosphorus pentachloride market.