Phosphate Fertilizer Weekly: Sulfur Corrects from High Levels, Phosphate Fertilizer Market Remains Firm

01 Phosphate Fertilizer Market Analysis

1.1 Phosphate Fertilizer Market Price Analysis

Monoammonium Phosphate

This week, the domestic monoammonium phosphate (MAP) market showed an overall firm and upward trend. After the industry guidance price was raised again by RMB 250/tonne last week, the market has basically completed price revaluation and entered a digestion and consolidation phase this week.

On the cost side, although sulfur prices fell somewhat as geopolitical premiums faded, they remained at historically high levels overall. Phosphate rock supply remained tight due to resource control policies, with prices holding firm at high levels. Sulfuric acid prices also fluctuated at elevated levels. With multiple raw material prices staying high, MAP producers continued to face relatively heavy cost pressure.

On the demand side, this week was still in the transition period between the end of summer fertilizer demand and the start of autumn fertilizer preparation. End-user fertilizer demand remained weak. Downstream compound fertilizer plants continued to operate at low rates. Some producers had already completed partial raw material restocking earlier and showed limited willingness to purchase high-priced MAP. Actual procurement was mainly small-volume and need-based. In-market transactions were mainly small rigid-demand orders, and overall trading activity remained limited.

Overall, the MAP market this week remained in a stalemate between high cost support and seasonally weak demand. The price center stayed firm at high levels, but upward momentum weakened.

According to FDD data, this week, the average price index of 55% powder MAP was 4,426.00, up 43.25 from last week, representing a week-on-week increase of 0.99%. The average price index of 55% granular MAP was 4,450.00, up 20.00 from last week, representing a week-on-week increase of 0.45%. The average price index of 58% powder MAP was 4,710.00, up 20.00 from last week, representing a week-on-week increase of 0.43%.

Diammonium Phosphate

This week, the domestic diammonium phosphate (DAP) market generally consolidated on a stronger note. The market price center continued to move upward, but trading activity remained relatively low.Sustained cost pressure was the core driver pushing the market higher this week.

On the cost side, high costs were the fundamental reason behind the continuous upward adjustment of guidance prices. Sulfur accounts for a relatively large share of phosphate fertilizer production costs, and sulfur prices have continued to rise since the beginning of this year, recently reaching historical highs. Although sulfur prices declined in the second half of the week due to changes in geopolitical factors, they remained high overall. Phosphate rock prices also continued to run at elevated levels. With multiple raw material prices staying high, DAP producers continued to face significant cost pressure, and the industry has remained in a long-term cost-inversion state.

On the demand side, the market is currently in the traditional off-season for DAP demand. Agricultural procurement has slowed, and end-user fertilizer demand has been limited. Downstream compound fertilizer plants also maintained low operating rates and remained cautious toward high-priced raw material procurement. New order follow-up was average. Market wait-and-see sentiment remained strong, trading activity was relatively light, and mainstream prices in many regions were largely unchanged from the previous period.

Overall, the DAP market this week maintained a stronger consolidation pattern amid high cost support and off-season demand pressure. The upward adjustment of guidance prices boosted price-support sentiment, but actual transaction follow-up remained limited, showing the characteristics of prices being quoted but few deals being concluded.

According to FDD data, this week, the average price index of 64% granular DAP was 4,571.67, up 155.00 from last week, representing a week-on-week increase of 3.51%. The average price index of 60% brown DAP was 4,350.00, flat from last week. The average price index of 57% DAP was 4,412.50, up 102.50 from last week, representing a week-on-week increase of 2.38%.

02 Domestic Phosphate Fertilizer Industry Operating Conditions

2.1 Domestic MAP Industry Operating Conditions

According to FDD statistics, this week, the domestic MAP industry operating rate was approximately 53.08%, up 4.92 percentage points from last week and up 10.22 percentage points year-on-year. The MAP industry operating rate increased slightly during the week but remained lower than the same period last year.

2.2 Domestic DAP Industry Operating Conditions

According to FDD statistics, this week, the domestic DAP industry operating rate was approximately 33.97%, down 0.04 percentage points from last week and down 13.71 percentage points year-on-year. The DAP industry operating rate declined during the week and remained lower than the same period last year.

03 Domestic Phosphate Fertilizer Weekly Output Trends

3.1 Domestic MAP Weekly Output Trend

According to FDD statistics, this week, domestic MAP output was approximately 211,700 tonnes, up 10.20% from last week and down 2.67% year-on-year. Domestic MAP weekly output increased during the week but remained lower than the same period last year.

3.2 Domestic DAP Weekly Output Trend

According to FDD statistics, this week, domestic DAP output was approximately 165,100 tonnes, down 0.12% from last week and down 21.71% year-on-year. Domestic DAP weekly output decreased during the week and remained lower than the same period last year.

04 Domestic Phosphate Fertilizer Port Inventory Trends

4.1 Domestic MAP Port Inventory Trend

According to FDD statistics, this week, major port inventories in the domestic MAP market were approximately 0 tonnes, flat from last week.

4.2 Domestic DAP Port Inventory Trend

According to FDD statistics, this week, major port inventories in the domestic DAP market were approximately 29,500 tonnes, flat from last week.

05 Phosphate Fertilizer Market Outlook

Monoammonium Phosphate

Looking ahead, the MAP market is expected to continue operating at high levels in the short term.

On the cost side, phosphate rock supply is constrained by policy factors and resource attributes, and prices are expected to remain firm at high levels in the short term, providing bottom support for costs. Although the sulfur market has been affected by the fading of international geopolitical premiums and expectations of increased cargo arrivals at ports, prices remain high, continuing to provide cost-push support for MAP.

On the demand side, the short term is still in a fertilizer demand gap period. Downstream compound fertilizer plants are consuming inventories and maintaining relatively low production schedules. Export cost-performance remains insufficient, and the market only has sporadic rigid demand, leaving demand support weak.

In the medium term, after autumn fertilizer preparation starts, procurement of raw materials for high-phosphorus base fertilizers will be released in a concentrated manner. Together with stable demand from industrial-grade products, trading activity is expected to gradually recover. However, end users remain highly cost-conscious, and channels are mostly purchasing and selling on a hand-to-mouth basis, making it difficult to support a one-sided sharp rise. After the fertilizer preparation period ends, demand is expected to weaken again.

Overall, in the short term, strong cost support and weak demand will keep the market in a narrow high-level stalemate. In the medium term, rigid demand from fertilizer preparation may drive prices to rise amid fluctuations, but the upside will be constrained by the procurement pace of channels. For the full year, the market is expected to fluctuate with agricultural off-peak and peak seasons, with long-term cost support at the bottom and no sustained one-sided upward or downward trend.

Diammonium Phosphate

Looking ahead, the DAP market is expected to continue consolidating in a wait-and-see pattern.

On the raw material side, raw material prices are expected to remain high, providing strong support to DAP costs. Phosphate rock supply continues to be affected by resource control policies, keeping supply tight and making prices unlikely to fall in the short term. Although sulfur prices have corrected to some extent as geopolitical premiums cleared in stages, the fundamental pattern of tight global supply has not changed fundamentally, and prices remain at historically high levels.

On the demand side, the market is currently in the traditional off-season after the end of spring farming and before the full launch of autumn fertilizer preparation. Agricultural end-user procurement has slowed, while downstream compound fertilizer producers are mainly digesting earlier inventories. New order follow-up is limited, and overall trading remains light.

However, demand expectations are gradually strengthening. The third quarter is the traditional peak season for DAP demand, and demand for raw materials used in autumn high-phosphorus fertilizer production is expected to be released in a concentrated manner. Some compound fertilizer producers have already begun making early arrangements for autumn fertilizer production.

Going forward, the DAP market is expected to remain in a stalemate between high cost support and off-season demand pressure. Raw material prices remain high on the cost side, producers are operating at low rates, and tight supply provides bottom support for prices. Current demand remains light, but expectations for autumn fertilizer preparation are building and may gradually release upward momentum.

The market is expected to maintain a high-level volatile consolidation pattern in the short term, with limited downside room for prices. Going forward, close attention should be paid to the actual pace of autumn fertilizer preparation, changes in raw material price trends, and whether export policy adjustment expectations emerge.

06 Sulfur Market Price Analysis

This week, the domestic sulfur market came under overall pressure and weakened, with the price center moving down noticeably. The core disruptive factor was the sharp change in the geopolitical environment.

At the beginning of the week, the U.S.-Iran agreement was officially signed, the Strait of Hormuz resumed navigation, and previously delayed sulfur cargo vessels were gradually dispatched. The geopolitical risk premium that had previously supported the market quickly dissipated, and market sentiment shifted from earlier strong expectations to rational wait-and-see sentiment. Market participants’ willingness to enter the market weakened significantly, spot trading turned light, prices lacked effective support, and quotations were adjusted downward continuously.

By region, performance varied, but the overall weak tone was consistent. In Northeast China, both solid and liquid sulfur prices fell sharply. Liquid sulfur offers in surrounding markets dropped significantly compared with pre-holiday levels, and producers in the region followed the decline. Auctions were mostly concluded at reserve prices, while downstream buyers closely monitored changes in external supply and wait-and-see sentiment continued to rise.

In Northwest China, prices once fluctuated upward at the beginning of the week due to acceptable transactions of low-priced cargoes and slight bullish expectations among some industrial and trading participants. However, as news of easing international tensions spread, downstream demand support remained weak, most enterprises maintained low-load operations, and transactions became more rational in the middle and later parts of the week.

The Shandong market showed a rise followed by a decline. At the beginning of the week, supported by downstream rigid-demand procurement, local refinery auction prices rose briefly. However, as news of the Strait reopening was released, bearish sentiment spread, downstream purchasing enthusiasm cooled noticeably, prices fell continuously, and high-priced cargoes saw weak transactions.

The East China market also operated weakly, with in-market transaction activity declining significantly and wait-and-see sentiment dominating.

In overseas markets, although there were rumors of CFR offers from North Africa, Indonesia and China, overseas merchants showed limited purchasing interest against the backdrop of resumed navigation through the Strait. Negotiation activity was quiet, and the international sulfur market also came under pressure.

Overall, against the backdrop of the rapid fading of earlier geopolitical premiums and a shift in market sentiment from wait-and-see to cautious bearishness, mainstream domestic sulfur prices fell noticeably this week. Downstream procurement was mainly based on rigid demand and price bargaining, holders became more willing to ship, and the overall market showed a weak pattern of supply exceeding demand.

Overall, after the clearing of geopolitical premiums, sulfur market pricing logic is gradually returning to fundamentals. With expectations of increased arrivals at ports and continued caution in downstream procurement, the loose supply-demand pattern may continue, and it will take time for market confidence to recover. The domestic sulfur market is expected to remain mainly weak and consolidative in the short term, with the price center likely to move further downward. Going forward, attention should be paid to the actual recovery pace of navigation through the Strait, actual arrivals of imported cargoes, and the marginal impact of changes in downstream operating rates on procurement demand.

According to FDD data, on June 26, the domestic granular sulfur price at Zhenjiang Port stood at RMB 8,900.00/tonne, down 0.56% from the previous working day. The granular sulfur price at Dafeng Port stood at RMB 8,850.00/tonne, down 0.90% from the previous working day. The powder/block sulfur price at Zhenjiang Port stood at RMB 8,880.00/tonne, down 0.22% from the previous working day. The powder/block sulfur price at Dafeng Port stood at RMB 8,830.00/tonne, down 0.56% from the previous working day. Solid sulfur in East China stood at RMB 8,730.00/tonne, flat from the previous working day, while liquid sulfur in East China stood at RMB 8,090.00/tonne, down 7.33% from the previous working day.

07 Domestic Sulfur Port Inventory Analysis

According to FDD statistics, this week, inventories at major ports in the domestic sulfur market were approximately 745,600 tonnes, down 6,000 tonnes from last week, representing a week-on-week decrease of 0.80%.

08 Domestic Sulfur Output Analysis

8.1 National Sulfur Output Analysis

This week, China’s sulfur sample output was 189,600 tonnes, with a capacity utilization rate of 44.62%, up 1.31 percentage points from last week.

8.2 East China Sulfur Output Analysis

This week, sulfur sample weekly output in East China was 29,300 tonnes, up 1,000 tonnes from last week. The capacity utilization rate was 30.49%, up 1.09 percentage points from last week. East China’s weekly output accounted for 15% of the national total.

8.3 East China Capacity Utilization Rate

According to FDD statistics, this week, the operating rate of the domestic sulfur industry in East China was approximately 30.49%.

8.4 Solid Sulfur Arrivals

According to FDD statistics, this week, solid sulfur arrivals at major ports nationwide in June were temporarily estimated at approximately 50,000 tonnes.