Global THPs market under pressure, prices may continue to fall in the coming weeks

As of mid-December 2024, the global THPs (Leticus-based hydroxymethylphosphonic acid sulfate) market continues to be under pressure. Affected by weak downstream demand and insufficient raw material support, the market is full of challenges and the prospects for recovery in the short term are limited.

in Asia, especially China, the THPs market is struggling due to weak demand in key downstream industries such as water treatment, textiles and coatings. The water treatment industry, a major consumer of THPs, slowed activity due to a reduction in industrial projects and seasonal operating restrictions. At the same time, construction activity in northern China slowed due to cold weather, further weakening demand for downstream products such as coatings, leading to a backlog of inventories by producers. In order to control fixed costs, Chinese manufacturers maintain stable production, exacerbating the oversupply situation in the market. Although the raw material phosphorus trichloride prices fell, the stable cost of formaldehyde provided only limited cost relief. Producers have had to resort to aggressive destocking strategies, including price discounts, to stimulate trading. In addition, a recent report by the China Chemical Industry Association showed a 5.8 percent year-on-year decline in industrial chemicals profitability, highlighting broader industry challenges affecting the production and pricing of THPs.

Indian market also showed a similar downward trend, affected by weak demand in downstream industries. Limited procurement in the water treatment and textile sectors, weakness in the real estate sector due to prolonged rainy season delays, and sluggish construction activity reduced the demand for paints and coatings, further adding to the pessimism in the THPs market. While Indian manufacturers are dealing with oversupply, they are also facing the challenge of excess inventory for exports caused by weak global demand. The operating rate remained low, reflecting ongoing efforts by producers to clean up inventories and mitigate losses. The downturn in domestic and international markets has led to limited pricing power for THPs producers and bleak prospects for recovery. Manufacturers received limited enquiries and buyers generally took a wait-and-see attitude.

in the United States, the THPs market also experienced price declines, driven by weak demand from the water treatment, textile and construction industries. Reduced industrial output and limited demand for seasonal water treatment chemicals added to the pessimism. High inventory levels, coupled with cautious sourcing strategies in the downstream industry, highlight ongoing challenges. Imports from Asian producers have exacerbated the oversupply situation, increased competition and put downward pressure on prices.

According to ChemAnalyst analysis, THPs prices will continue to face downward pressure in the coming weeks. Producers' rush to clear inventories before the end of the year, coupled with continued weak demand resulting from the usual suspension of industrial activity during the holiday season, will weigh on prices. Broader challenges in the water treatment, construction and textile sectors, including reduced funding for infrastructure and housing projects, are expected to keep downstream demand subdued.