US Tricalcium Phosphate Prices Witness a Decline Trend Amidst Economic Uncertainties

In November 2023, the United States experienced a notable dip in the prices of Tricalcium Phosphate. The primary drivers behind this downward trajectory were the decreasing offtake and depreciating demand from downstream industries. Moreover, the lower raw material phosphoric acid prices further supported this trend. As downstream sectors grappled with challenges and uncertainties, the ripple effect on Tricalcium Phosphate prices became evident.

The United States, traditionally a Tricalcium Phosphate importer, has aligned itself with major exporting nations to sustain competitiveness in the market. A significant factor in this shift is the downward trajectory in the price of Phosphoric Acid, a key precursor to Tricalcium Phosphate. A slump in Phosphoric Acid prices is primarily attributed to limited cost support from global Phosphorus rock. The situation is further aggravated by subdued trading activities in the regional phosphoric acid market, stemming from ample existing stocks and weak spot purchasing activities impacting the Tricalcium Phosphorus prices. Despite producers' attempts to safeguard margins, the fluctuating cost trend has created instability, thereby influencing Tricalcium Phosphate prices in the USA. Turning attention to feedstock prices for phosphate rock in November, the overall domestic market in exporting countries has exhibited a steady trend following a significant decline in preceding months. Various mining enterprises in China, particularly in the Guizhou, Sichuan, and Guangxi regions, have increased prices for mid to high-end grade phosphate rock. However, these prices remain lower compared to the average price range. The supply of low-priced phosphate rock in the market is gradually diminishing, leading to a narrowing gap between high and low prices. This shift has had repercussions on the downstream market, impacting Tricalcium Phosphate prices as well.

November 2023 proved to be a challenging period for the global economy, marked by escalating inflation and concerns about a potential recession. These uncertainties prompted investors to adopt a more cautious approach, leading to prices declining across various industries, including Tricalcium Phosphate. The Federal Reserve responded by implementing its fifth consecutive interest rate hike of 0.75%, raising the cost of borrowing for companies. This move could potentially result in slower economic expansion and diminished corporate profits.

The Purchasing Managers' Index (PMI) for the United States recorded a contraction, dropping from 50.4 in October 2023 to 46.7 in November 2023. Furthermore, the market sentiments were influenced by the US Federal Reserve's declaration, suggesting the possibility of a 5.5% interest rate. The suggested increase in interest rates could signify reduced demand from industries, impacting Tricalcium Phosphate prices in the USA.

According to ChemAnalyst, the prices are expected to stabilize on the upper side of the trajectory in the upcoming months. As the new year commences, market players are anticipated to replenish their inventories, possibly placing bulk orders to meet anticipated demand. A stable increase in demand will exert pressure on inventories, keeping the Tricalcium Phosphate market resilient despite the challenges faced in November 2023. The global economic challenges further amplified this trend, with uncertainties impacting market dynamics. However, industry experts foresee stability in the coming months as market players adapt to the changing landscape and demand for Tricalcium Phosphate remains steady.