Recent international developments have injected a shot in the arm for the phosphate chemical industry: In November 2025, the U.S. Geological Survey (USGS) first included phosphates in its list of critical minerals. Then on February 18, 2026, the Trump administration took further action by signing an executive order elevating phosphorus and glyphosate to the level of national security strategy. This move not only underscores the strategic value of phosphate resources but also signals a reshaping of the global phosphate chemical industry landscape.

The phosphate chemical industry, a foundational heavy chemical sector, uses phosphate rock as raw material to produce fertilizers, phosphoric acid, phosphates, and phosphides. By 2024, China's phosphate chemical industry had reached an output value of 245 billion yuan, making it the world's largest producer of both phosphate rock and phosphate chemicals. Currently, demand for power and energy storage batteries, represented by lithium iron phosphate, is becoming the core growth engine. It is projected to drive an additional demand for nearly 4 million tons of phosphate rock by 2025.

In the future, the value of the phosphorous chemical industry chain will no longer be confined to resource endowment but will increasingly focus on the capabilities of efficient resource utilization and integrated industrial chain development. Enterprises capable of establishing a full-chain presence across “phosphate ore-phosphoric acid-high-value-added products” while successfully expanding into high-end sectors like new energy materials and electronic chemicals—thus building a tripartite core competitiveness encompassing resources, technology, and green circularity—will dominate this round of industrial value reassessment.

Phosphate rock serves as the origin and foundation of the phosphorous chemical industry chain, with prices remaining persistently high since 2021. Phosphorous chemical production requires key supporting raw materials including sulfur, synthetic ammonia, coke, silica, and electricity. Among these, sulfur and synthetic ammonia are vital inputs for producing wet-process phosphoric acid and phosphate fertilizers. Their prices exhibit strong linkage with international markets, significantly impacting the profit stability of midstream processing segments.

Yellow Phosphorus (Thermal Process)

Yellow phosphorus is produced via electrothermal reduction of phosphate rock, coke, and silica at high temperatures. It serves as the core feedstock for thermally produced phosphoric acid, pyrophosphorus, phosphorus trichloride (a glyphosate intermediate), and other products. This process consumes extremely high energy (approximately 13,000–15,000 kWh/ton) and faces significant environmental pressures, categorizing it as a “high-energy-consuming” industry subject to strict national regulation. Globally, environmental and cost pressures have led to a significant concentration of yellow phosphorus production capacity in China.

Wet-Process Phosphoric Acid and Purified Phosphoric Acid

Wet-process phosphoric acid is produced by decomposing phosphate rock with sulfuric acid. It serves as the primary production route for phosphate fertilizers and industrial phosphates, offering substantially lower costs than the thermal process but yielding products with higher impurity levels. Purified phosphoric acid (PPA) is obtained by refining wet-process phosphoric acid through solvent extraction and other techniques. This high-purity phosphoric acid serves as a critical raw material for producing lithium iron phosphate, food-grade, and electronic-grade phosphates, presenting significant technological barriers.

Monopotassium Phosphate/Diammonium Phosphate (MAP/DAP) (Phosphate Fertilizers)

Monopotassium phosphate (MAP) and diammonium phosphate (DAP) are high-concentration basic phosphate fertilizers, serving as the “ballast” for ensuring food security. In 2024, China's MAP and DAP production reached approximately 11.3 million tons and 13.9556 million tons, respectively. While the industry faces overall overcapacity, prices exhibit cyclical fluctuations driven by raw material cost support and export policy impacts.

Downstream: Diversified Applications and Value Extension

1. New Energy Battery Materials

This represents the core growth driver for reevaluating the value of phosphoric acid chemicals. Wet-process purified phosphoric acid can be further processed into iron phosphate, which is then synthesized with lithium sources to produce lithium iron phosphate (LFP) cathode materials. These are widely used in new energy vehicles and energy storage applications. Each ton of LFP produced consumes approximately 2.5–4 tons of phosphate rock.

Major global suppliers in the LFP cathode material sector include China's Hunan Yueneng and Defang Nano, as well as the U.S.-based Lithium Werks.

2 Phosphorus-Containing Pesticides (Glyphosate)

Glyphosate is the world's most widely used broad-spectrum herbicide, synthesized using phosphorus trichloride—a key downstream intermediate of yellow phosphorus. China is the largest global producer of glyphosate, accounting for approximately 70% of worldwide capacity.

3. Fine Phosphorus Chemicals and Electronic-Grade Products

Fine phosphorus chemicals encompass phosphorus-based flame retardants, water treatment agents, food additives, and phosphorus-based pharmaceutical intermediates. Electronic-grade phosphoric acid (particularly UPSS grade and above) serves as a critical material for wet etching and cleaning in semiconductor chip manufacturing, featuring extremely high technical barriers.

Summary and Outlook

Resource strategization and integration become competitive cornerstones: The scarcity and strategic importance of phosphate rock are increasingly evident. Enterprises possessing stable, high-grade phosphate resources and achieving integrated “mine-chemical-fertilizer-materials” layouts will gain unparalleled cost advantages and risk resilience. Policies encourage resource concentration among leading companies, making “mine-chemical integration” the industry's core barrier to entry.

Demand Structure Undergoes Historic Transformation: Phosphate chemical demand drivers are shifting from a single “agricultural cycle” to a dual-engine model of “agricultural inelastic demand + new energy growth demand.” While phosphate fertilizers remain the foundation (accounting for approximately 54%), demand from the new energy sector (lithium iron phosphate, lithium hexafluorophosphate) is growing at over 30% annually, becoming a key variable reshaping industry valuation and growth logic.

Technological iteration is driving value chain upgrading: Industry competition is shifting from scale-based cost advantages to technology-driven added value. Wet-process phosphoric acid purification technology, phosphogypsum

As an integrated internet platform providing benchmark prices, on February 26, the benchmark price of SunSirs phosphoric acid (wet process) was RMB 7,200.00/ton, an increase of 0.70% compared with the beginning of the month (RMB 7,150.00/ton).

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