A strong stock position and differentiated sourcing ensure quick delivery times of phosphoric acid even amidst global insecurity
Phosphoric acid (H3PO4) is a crucial raw material used in water treatment and in the manufacturing of resins, detergents, as well as in food and beverages. The main ingredient of phosphoric acid is yellow phosphorus, a mineral that can only be found in a handful of countries globally. This makes phosphoric acid vulnerable to supply issues and its prices prone to fluctuations. At Haarla, we always do our outmost to keep our customers covered in a world full of insecurities. Read more about what to expect in the phosphoric acid markets in 2023, and how Haarla can help you increase your supply security.
Phosphoric acid is manufactured using yellow phosphorus – a mineral that develops in the soil over the course of thousands of years. Even though phosphoric acid can be and is manufactured in Europe, its main ingredient, yellow phosphorus, is mined primarily outside the EU. This makes us dependent on the global markets.
Some of the world’s largest reserves of yellow phosphorus are located in Morocco, China, Jordan, Saudi-Arabia and Brazil. Due to their strategic importance, the phosphorus mines are usually state-owned and controlled by the government. For example, in China, the government has closed down yellow phosphorus mines on short notice due to problems in national energy supply and in order to curb the pollution. Under these circumstances, the prices are hard to predict, and the availability can face sudden fluctuations.
The link between world food security and phosphoric acid
In addition to being refined into phosphoric acid, yellow phosphorus is also used to make phosphates – fertilizers to stimulate plant growth and development. Now that the global population has already reached 8 billion people and is growing by around 67 million per year, the demand for food is not expected to decrease. Without yellow phosphorus and phosphates, the crop yields would go down dramatically and worsen the global food crisis. A higher demand for fertilizers indirectly also increases the price of yellow phosphorus – and finally, of phosphoric acid.
In countries like China and Brazil, where agriculture is a major part of the economy, the governments consider yellow phosphorus a strategic resource, and aim to control the production and export of phosphates. This link between world food security and yellow phosphorus indirectly affects not only the price but also the availability of phosphoric acid.
What to expect in 2023
As the above examples illustrate, the price and availability of phosphoric acid is dependent on many factors beyond our control. In the aftermath of the COVID19 pandemic and with the current political and economic instabilities, the global demand for phosphoric acid is lower than usual. The manufacturers are eager to sell, which hampers the prices. While no quick or dramatic changes in the price of phosphoric acid can be foreseen in the near future, the global turmoil and increasing nationalization of natural resources around the world can cause availability issues. For example phosphoric acid manufacturers used to close annual deals. With the increasing unpredictability in the markets, the deals can now be made monthly or even for shorter periods. In worst cases prices are only valid for a day. Furthermore waiting times for raw materials are becoming longer
Increased supply security with Haarla
Thanks to Haarla’s strong stock position and differentiated sourcing, our customers have the privilege of quick delivery times of phosphoric acid, even amidst the global challenges. By sourcing the material from several countries and several suppliers, we are less vulnerable to fluctuations. In addition to the supply security, we also offer a variety of concentrations and different purity grades of phosphoric acid to meet the needs of your industry.
At Haarla, we always want to help our customers make good choices. If you want to discuss sourcing phosphoric acid for your production, the Haarla experts in our Industry segment are at your service.
Contact us for more information!