According to China Chemical Industry News, the recent continued rise in upstream raw material prices has driven the market for monoammonium phosphate (MAP) upward once more. Currently, the market price of MAP has increased by approximately 100 RMB/ton compared to the beginning of the month, yet the industry as a whole remains mired in losses. With the upward trend in raw material prices unlikely to abate in the short term, the question remains: will MAP prices continue to climb?
In June, the prices of upstream sulfur and sulfuric acid surged, causing MAP production costs to steadily escalate.
Regarding sulfur, as of June 8, the ex-warehouse quote for granular sulfur at Yangtze River ports rose to 9,600 RMB/ton. This represents an increase of RMB2,120 (28.34%) since the beginning of the month, RMB5,600 (140%) since the start of the year, and a staggering RMB6,990 (267.82%) year-on-year. The rise in sulfur prices alone increased the theoretical production cost of MAP by 954 RMB/ton between the start of the month and June 8. Based on the current mainstream market quote of RMB 4,350, if production relies entirely on high-priced market sulfur, the loss per ton of MAP approaches RMB2,000. Although supply guarantee policies allow some enterprises to access sulfur at stable prices to offset high costs, the available volume falls far short of total production requirements.
The sulfuric acid market has also seen significant price increases. The mainstream delivered price for sulfuric acid in Hubei is 1,780 RMB/ton—up 30 from the beginning of the month, RMB695 (64%) from the start of the year, and RMB1,110 (165.67%) year-on-year. Consequently, the theoretical production cost of MAP has surpassed 5,000 RMB/ton, resulting in a gross loss exceeding 700 RMB/ton for producers.
Under these conditions, the domestic MAP industry faces mounting operational pressure, and overall operating rates continue to decline. Small and medium-sized enterprises, lacking integrated raw material supplies or access to guaranteed supply channels, struggle to reverse the situation where production inevitably leads to losses; facilities that halted operations earlier have yet to resume production, and there are currently no clear plans to restart. Large-scale phosphate and compound fertilizer enterprises—which possess resource advantages and shoulder the responsibility of ensuring supply—can allocate some lower-priced raw materials to offset cost pressures; however, they still need to purchase significant quantities of high-priced market-rate raw materials to bridge supply gaps. Compounded by policies aimed at ensuring supply and stabilizing prices that constrain product selling prices, profit margins have been severely squeezed, forcing enterprises to limit production to meet specific supply-guarantee orders and reduce operating loads.
Under the weight of heavy costs, capacity utilization across the industry has continued to decline. Data shows that as of June 4, the capacity utilization rate of the domestic monoammonium phosphate (MAP) industry fell to 44.43%—a slight month-on-month drop of 0.1 percentage points and a significant year-on-year decline of 8.92 percentage points—placing operating levels at a low for the year.
Overall, the MAP market is underpinned by strong cost support and tight supply, with downstream purchasing driven primarily by essential demand. Driven by a sharp rise in sulfur prices, market inquiries have increased, and demand sentiment is warming up. Currently, sulfur supplies remain tight and international quotes are firm; prices continue to rise, keeping raw material costs high and maintaining pressure on production costs. The industry remains in a state of low operating rates and low inventory; spot supplies are scarce, and manufacturers are strongly inclined to hold firm on prices, suggesting further upward potential for market prices in the future.
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