Yellow Phosphorus Prices Move Sideways Amid Supply-Demand Tug of War

Yellow Phosphorus Prices Move Sideways Amid Supply-Demand Tug of War

Introduction

This week, the domestic yellow phosphorus market maintained a stable yet stagnant operating trend. Spot prices in the Yunnan, Guizhou, and Sichuan regions consistently held within the range of 22,900 to 23,000 RMB/ton. However, trading activity slowed from the beginning of the week. A significant gap in price expectations between buyers and sellers resulted in very few actual transactions. This created a standoff where high prices deterred deals while sellers resisted lowering their offers.

From a Price Perspective

Major suppliers continued their strategy of holding back sales to support prices. Even smaller factories with shipment needs showed little willingness to offer discounts. This week, companies in the Yunnan, Guizhou, and Sichuan regions kept small-volume quotes firm at 23,000 RMB/ton. Actual payment-upon-delivery transaction prices were around 22,900 RMB/ton in Yunnan and Sichuan. Supply in Guizhou was relatively tight, with limited offers firm at 23,000 to 23,100 RMB/ton, and actual transaction prices referenced at 23,000 to 23,050 RMB/ton. Although downstream buyers continued making inquiries, they generally pressed prices down to around 22,800 RMB/ton, creating a clear mismatch with seller quotes. The deadlock between upstream and downstream parties persisted, leaving prices trapped without clear direction.

From a Supply Perspective

Overall industry operating rates remained favorable. As of this writing, daily output in the main production areas of Yunnan, Guizhou, and Sichuan reached 2,352 tons. Specifically, Yunnan's daily output was 1,240 tons, with some small factories resuming production to supplement supply. Guizhou's daily output was 492 tons, though maintenance at some enterprises tightened local supply. Sichuan's daily output was 620 tons. The overall supply base remained ample, and some producers still needed to ship inventory. This sufficient supply prevented any strong upward pressure on prices during this period. At the same time, cost considerations led some yellow phosphorus producers to anticipate a future recovery in downstream restocking demand. Therefore, they were temporarily unwilling to accept low-priced orders or concede profits easily, which in turn prevented significant price declines.

From a Demand Perspective

Downstream enterprises maintained essential demand but acted cautiously. Phosphorus trichloride producers themselves faced limited profit margins. Although these downstream buyers had procurement plans, their acceptance of high-priced yellow phosphorus was very low, and they consistently sought price reductions in their inquiries. Furthermore, after a wave of concentrated procurement by some end-users last week, short-term restocking demand had weakened. The overall inquiry and procurement sentiment leaned toward cautious observation. This rational, wait-and-see attitude among traders and downstream players dominated purchasing behavior, further dampening market trading activity. In summary, while essential downstream demand provided a floor, the persistent pressure for lower prices and lack of aggressive buying prevented any sustainable price increases.

Later Market Forecast

In conclusion, without catalysts such as a concentrated supply reduction or a wave of downstream restocking, the current supply-demand stalemate in the yellow phosphorus market is unlikely to break in the short term. Prices this month are expected to fluctuate mainly within the range of 22,800 to 23,000 RMB/ton. Cost support and the reluctance to sell at lower prices from the supply side will underpin the market, while price resistance from buyers and the ample supply base will limit upside potential. Therefore, the near-term outlook for the yellow phosphorus market remains one of deadlock and range-bound price movement.