Wavering Offtakes Pressures Diammonium Phosphate Prices to Fall in Europe and the USA

Recent pricing assessments shows, Diammonium Phosphate (DAP) showcased a downward trend in June 2023 in both North American and European regions. As per the data, the prices of DAP fell by USD 62/MT in the USA market and USD 34/MT in Germany. The key driving factor behind the declining price was low buying enthusiasm from the end-user market owing to surplus stock availability. Additionally, mounting inflationary pressure and rising interest rates in Europe have impacted the end -user markets and consequently affecting the overall market dynamics.

The European market has been grappling with price fluctuations for a prolonged period, primarily due to deepening recession and war repercussions in the region. The prices of DAP witnessed a fall of 5.5% during June 2023 in Germany. Additionally, factors such as easing energy prices and diminished demand from domestic fertilizer market supported the dip in prices. Furthermore, the ongoing war in the region has led to economic sanctions on multiple countries leading to growing inflation.

Additionally, as indicated by German Federal Statistical Office the Consumer Price Index has declined by 0.1% in May 2023. However, inflation has dropped down from 6.1% in May 2023 to 5.5% in June 2023 in the region, but European Central Bank still intends to raise interest rates high to control inflation further.

Similarly, the price of DAP has shown a downward trajectory in the USA market. The product faced limited demand from the downstream fertilizer industry owing to stockpiled inventories. Declining prices of upstream Ammonia and Natural Gas contributed to the prevailing price trend of DAP.

However, data from the US Bureau of Labor and Statistics indicated a marginal increase of 0.1% in the Consumer Price Index of the country in May 2023. Additionally, as reported by the Federal Reserve of Economic Data, the Industrial Production Index rose to 103.1 during the period.

As per the ChemAnalyst, the prices of DAP are expected to continue declining in July on the back of diminished demand from the downstream fertilizer industry. However, in coming months future market sentiments suggest a potential shift towards an inclining trend of DAP in both North American and European region.  Inclining prices of upstream Ammonia and Natural Gas may influence the prices of DAP.  Further, the economic conditions of both the countries are expected to revive in the coming months. Additionally, fluctuations in the prices of crude oil may affect the production rate and may lead to an increase in prices of DAP.