Market Volatility in Phosphorus Supply.

Recent feedback from producers in China indicates that phosphorus pricing has become highly volatile. This instability is primarily due to shortages in sulphuric acid, a critical component in the production of phosphoric acid—the essential raw material that reacts with urea to produce urea phosphate. The heightened demand for sulphuric acid is largely driven by its increased use in electric vehicle (EV) and battery production. As a result, phosphoric acid production is under pressure, leading to fluctuating prices and availability. ​

Over the past month we have seen large week on week increases in feed phosphate prices being offered to the Australian market, including all major feed and lick producers. 

Strategic Planning Through Forward Commitments.

Given these market dynamics, securing forward commitments for urea phosphate and phosphoric acid with us is a prudent strategy to mitigate risks associated with price volatility and supply constraints. We also believe that the price will continue to increase. Therefore, locking in a commitment now enables us to secure supply at a favourable price. 

In contrast, global shipping prices remain low at present, which is helping to offset some volatility in the phosphate price landed in Australia.  If these spot rates start to increase, we expect further increases in the cost of urea phosphate, phosphoric acid and other feed inputs.  Please feel free to contact us to explore forward commitment options or if you have any questions regarding this matter.