Singapore: As per the ChemAnalyst pricing intelligence, the Chinese Yellow Phosphorus market in China has softened tremendously over the past few weeks in December 2022. The Yellow Phosphorous market has stabilized in a previous couple of weeks after observing a consistent drop. In contrast to that, the Yellow Phosphorus market observed considerable growth at the start of the month, proportional to the rise in cost support from the feedstock Phosphoric Acid followed by a persistent drop in the latter half of the month. Since, the beginning of December 2022, the mindset of the manufacturers has been keener towards restricting the cash flow ahead of the year-end in the Chinese domestic market, further inflating the price competitiveness amongst the major manufacturers of Yellow Phosphorus in the Southeast Asian market.

The overall Yellow Phosphorous market outlook has been snuck, especially after the rapid jump in the positive cases of COVID in China. In addition, the unclear data presented by the Chinese authorities has brought numerous uncertainties to the arbitrage pattern with China. The major economies across the globe have enforced a series of restrictions to contain the spread of the new B.1.1.7 variant of COVID. As a ripple effect, the terminal demand for Yellow Phosphorus has dropped exponentially impacting the offers in the domestic market.

Although market players have sustained netback margins by adjusting operating rates at Yellow Phosphorus' manufacturing facilities, demand from downstream industries has remained sluggish in the second half of the fourth quarter. The consistent drop in temperature in the northern hemisphere has led to a drop in Yellow Phosphorous demand from the fertilizers industry. At the same time, the end of NEV subsidies has made downstream EV battery cathode manufacturers cautious about the upcoming shift in supply-demand patterns. EV sales have started to drop ahead of the fourth quarter, and there are sufficient inventories of raw materials to sustain Yellow Phosphorus production in the upcoming quarters. As a result, downstream players are expected to place new inquiries conservatively or as required. Thus, Yellow Phosphorus prices may remain rangebound in the coming weeks.