The price of yellow phosphorus rising dramatically

In the fourth week of February, the domestic price of yellow phosphorus rose from RMB33,300 per ton at the beginning of the week to RMB37,700 at the weekend, which is a weekly increase of 13.3%, having become the highest-price-rising chemical variety of the week. Compared with the same period last year, the price increase reaches 121.6%.

In the eyes of industry insiders, there are two main reasons for the sharp price rise in the domestic yellow phosphorus market. One is due to the tight market supply. According to incomplete statistics, the current daily output of yellow phosphorus in China’s three major provinces is about 1,885 tons, which is 55 tons less than the output of February 10, resulting in a relatively short supply. The other is due to the resumed demand from downstream industries. Most of the downstream manufacturers did not keep large amount of stocks before the Spring Festival. After the recovery of transportation at the end of Spring Festival Holiday, downstream phosphorus trichloride and glyphosate manufacturers have started to make purchases. Thus, the overall demand has recovered. Before and after the Lantern Festival, the downstream phosphoric acid manufacturers resumed production, which is further backup for the market demand. At present, the glyphosate market has stopped declining and started to rebound, which is a positive sign to the yellow phosphorus market.

As regards the market at a later date, a market analysis institution holds that the upstream phosphate ore may stay high while the coke market will continue to run steadily and firmly.  The electricity tariff will be slightly upregulated in March, which will play a part in backing up the price of yellow phosphorus. The downstream price inquiry will increase while quotes from manufacturers may continue to rise. For the short run, the price of yellow phosphorus is expected to still go upward.