August 21 Phosphate Fertilizer Weekly: Ongoing Cost-Demand Balance Keeps the Phosphate Fertilizer Market in a Wait-and-See Mode

Phosphate Fertilizer Market Analysis

MAP:

The domestic MAP market continued to operate weakly this week. On the cost side, US-Iran tensions continued to escalate. The United States indicated that it would impose unprecedented economic isolation on Iran and strengthened shipping controls in the Strait of Hormuz, while Iran responded firmly. The two sides are currently focused on economic confrontation and maritime standoffs, with no direct military conflict yet. Risks to energy flows through the Strait have increased. Domestic sulfur prices consolidated with divergent trends; port inventories remained low; sulfuric acid prices remained weak; and phosphate rock prices faced pressure at elevated levels. Multiple raw material prices remain high, leaving MAP producers under considerable cost pressure. On the demand side, some downstream compound fertilizer producers continued to report slow sales and maintained only limited rigid-demand procurement. New-order transactions were limited and demand remained weak. Overall, the MAP market is expected to remain weak in the short term. Attention should focus on raw material price trends, the pace of autumn fertilizer procurement by downstream compound fertilizer producers, and the pass-through impact of geopolitical developments on costs.

According to Feidoodoo data, the average 55% powder MAP price index was 4,392.50 this week, down 2.00 from last week, or 0.05%; the average 55% granular MAP price index was 4,450.00, unchanged from last week; and the average 58% powder MAP price index was 4,693.33, unchanged from last week.

DAP:

The domestic DAP market consolidated this week. On the cost side, US-Iran tensions continued to escalate. The United States indicated that it would impose unprecedented economic isolation on Iran and strengthened shipping controls in the Strait of Hormuz, while Iran responded firmly. The two sides are currently focused on economic confrontation and maritime standoffs, with no direct military conflict yet. Risks to energy flows through the Strait have increased. Domestic sulfur prices consolidated with divergent trends; port inventories remained low; sulfuric acid prices remained weak; and phosphate rock prices also remained high. Multiple raw material prices remain elevated, providing solid support to market prices. On the demand side, downstream purchasing remained subdued. Most compound fertilizer plants continued to operate at low rates, purchasing interest was generally limited, downstream inquiries were sporadic, and follow-up on firm orders was constrained. Market activity remained low and transactions were unable to generate meaningful volume. Overall, the DAP market is expected to remain in a stalemate and consolidation pattern in the short term. Attention should focus on changes in raw material prices, downstream demand follow-up, and subsequent export policy adjustments.

According to Feidoodoo data, the average 64% granular DAP price index was 4,571.67 this week, unchanged from last week; the average 60% brown DAP price index was 4,630.00, up 280.00 from last week, or 6.44%; and the average 57% DAP price index was 4,411.50, down 18.00 from last week, or 0.41%.

Domestic Phosphate Fertilizer Operating Rates

According to Feidoodoo data, the domestic MAP industry operating rate was approximately 55.55% this week, unchanged from last week and down 9.10% year on year. The MAP operating rate showed no material weekly change and remained below the level recorded in the same period last year.

According to Feidoodoo data, the domestic DAP industry operating rate was approximately 43.04% this week, up 1.56% from last week and down 14.45% year on year. The DAP operating rate increased during the week but remained below the level recorded in the same period last year.

Domestic Weekly Phosphate Fertilizer Output

According to Feidoodoo data, domestic MAP output was approximately 223,300 tonnes this week, unchanged from last week and down 11.84% year on year. Weekly MAP output declined during the week and remained below the level recorded in the same period last year.

According to Feidoodoo data, domestic DAP output was approximately 209,200 tonnes this week, up 3.77% from last week and down 26.83% year on year. Weekly DAP output increased during the week but remained below the level recorded in the same period last year.

Domestic Phosphate Fertilizer Port Inventories

According to Feidoodoo data, MAP inventories at major domestic ports were approximately zero tonnes this week, unchanged from last week.

According to Feidoodoo data, DAP inventories at major domestic ports were approximately 29,500 tonnes this week, unchanged from last week.

Phosphate Fertilizer Market Outlook

MAP: Looking ahead, the MAP market will remain in a balance between costs and demand. In the short term, elevated sulfur, phosphate rock and other raw material prices, combined with geopolitical disruptions to imported supply, will keep production costs high. Producers have a strong willingness to support prices, limiting room for a sharp decline. On the supply side, producers will flexibly adjust operating rates according to orders and raw material conditions, prioritizing the fulfilment of earlier contracts. On the demand side, as autumn fertilizer production progresses, rigid demand for raw materials from downstream compound fertilizer producers will be released. However, high raw material prices will keep purchasing rational, with buyers mainly procuring as needed rather than making large-scale concentrated restocking purchases. Demand has a ceiling, while exports will have only a limited effect in diverting domestic supply absent a material policy adjustment. Overall, without a major bullish driver, the market is unlikely to enter a one-way upward trend and will likely fluctuate within a high range. Attention should focus on sulfur price volatility, raw material arrivals, the extent of increases in downstream compound fertilizer operating rates, and geopolitical developments. The market could move lower if raw materials ease materially or if terminal autumn fertilizer procurement falls short of expectations.

DAP: Looking ahead, the DAP market is expected to continue consolidating within a narrow range at high levels. On the supply side, mainstream domestic producers are still mainly fulfilling advance orders. Sales pressure is relatively manageable with undelivered orders providing support, and producers have a strong willingness to support prices in the short term. However, industry operating rates are expected to rise, and circulation of available supply may gradually increase. On the demand side, the autumn fertilizer procurement cycle has not yet fully begun. Downstream distributors remain cautious, large-scale restocking has been delayed, and only limited purchases based on demand are taking place, making it difficult for demand to form an effective short-term upswing. On the cost side, phosphate rock prices remain firm at high levels, while sulfur and synthetic ammonia fluctuations have narrowed. Cost support remains solid and is the key foundation underpinning current DAP prices. On the export side, international prices remain attractive, but export inspection requirements and quota controls limit exports' actual flexibility in balancing domestic supply and demand. Overall, the current DAP market is balanced between supply and demand, while high costs and policy-driven price stability provide two-way constraints. Prices have limited room for substantial moves in either direction, and the market is expected to maintain narrow-range consolidation at high levels in the short term. Attention should focus on the pace of autumn fertilizer procurement, raw material price trends, and export policy developments.

Sulfur Market Analysis

The domestic sulfur market showed regional divergence overall this week. Most regions moved weakly lower, while only a few areas saw prices stabilize and rebound because of temporary supply-demand mismatches. On the geopolitical side, US-Iran tensions continued this week, and disputes over shipping through the Strait of Hormuz persisted. This could disrupt global seaborne sulfur flows and provide medium- to long-term support to supply expectations. However, short-term geopolitical sentiment had limited impact on domestic spot prices and was unable to reverse the current weak spot-market tone. Trading at ports was subdued and the spot market benchmark continued to move lower. Domestic material trends differed by region, while upstream-downstream bargaining continued. Sellers' pricing power gradually weakened, and some traders actively adjusted offers to facilitate sales. Buyers remained strongly cautious, with some transactions attempting to use average-price settlement to avoid price-volatility risks. By region, prices in Northeast and Northwest China declined rationally. Auction sentiment fluctuated during the week, downstream demand support was insufficient, and some cargoes were sold at lower prices after failing to clear at auction. Shandong moved from weakness to strength: prices fell early in the week, but concentrated downstream restocking improved auction sentiment, while lower refinery supply tightened regional availability and supported a recovery. East China remained at high levels but edged lower within a narrow range. Rigid demand remained stable and supply was generally tight, but purchasing became more cautious as refinery maintenance neared completion. Overall, high prices continue to suppress downstream purchasing interest, rigid-demand follow-up remains inadequate, and downward pressure persists. Tighter supply from some refineries may create temporary rebound opportunities, but their sustainability is weak. Attention should remain on overseas cargo shipments, the progress of domestic refinery maintenance, downstream phosphate fertilizer and smelting-sector restocking, and the indirect impact of US-Iran geopolitical developments on ocean freight.

According to Feidoodoo data, on August 21, granular sulfur at Zhenjiang Port was priced at 8,700.00 yuan/tonne, down 50 yuan/tonne from the previous working day; granular sulfur at Dafeng Port was priced at 8,680.00 yuan/tonne, down 50 yuan/tonne; powdered and lump sulfur at Zhenjiang Port was priced at 8,650.00 yuan/tonne, down 50 yuan/tonne; powdered and lump sulfur at Dafeng Port was priced at 8,630.00 yuan/tonne, down 50 yuan/tonne; solid sulfur in East China was priced at 9,100.00 yuan/tonne, unchanged; and liquid sulfur in East China was priced at 8,755.00 yuan/tonne, up 5 yuan/tonne.

Domestic Sulfur Port Inventory Analysis

According to Feidoodoo data, sulfur inventories at major domestic ports were approximately 880,100 tonnes this week, an increase of 38,900 tonnes from last week, up 4.6% month on month.

Domestic Sulfur Output Analysis

This week, China's sample sulfur output was 193,700 tonnes, with capacity utilization at 45.57%, up 0.18 percentage points from last week.

In East China, sample sulfur output was 26,600 tonnes this week, up 300 tonnes from last week. Capacity utilization was 27.65%, up 0.36 percentage points from last week. East China accounted for 14% of national sulfur output.

According to Feidoodoo data, sulfur industry operating rates in East China were approximately 27.65% this week.

According to Feidoodoo data, planned arrivals of imported solid sulfur at major domestic ports in August stood provisionally at 53,000 tonnes as of this week.