This week (June 8–12), the core domestic phosphorus chemical value chain (phosphate rock, yellow phosphorus, and wet-process phosphoric acid) exhibited a trend characterized by tight upstream raw material supplies, significantly rising costs, dual-sided demand support, and price increases across the board. Geopolitical disruptions in the Middle East hindered sulfur imports and kept port inventories low; combined with tight domestic phosphate rock supplies, this drove up costs at the source of the value chain. Meanwhile, steady essential demand from the agricultural sector and sustained high production in the new energy lithium iron phosphate (LFP) value chain generated firm demand for midstream yellow phosphorus and downstream phosphoric acid. Market trading was active throughout the week, with prices for all products rising steadily; the value chain's prosperity improved significantly, maintaining a strong overall performance at high price levels.

I. Value Chain Prices and Regional Spot Market Trends

Prices for all phosphorus chemical products rose in tandem this week, with the overall price level shifting upward; regional quotes diverged slightly based on the pace of supply circulation.

Phosphate Rock

Quotes for mainstream grades of phosphate rock remained firm; the mainstream ex-factory price for 30% grade ore held steady above 1,000 RMB/tonne, showing a slight overall increase during the week. Major producing regions—such as Yunnan, Guizhou, and Sichuan—maintained strict control over supplies, prioritizing long-term contracts and limiting spot market circulation, which kept quotes firm. In consuming regions across Central and East China, delivery prices were slightly higher than at the source due to transportation costs. There was minimal room for price negotiation on spot goods, as mines showed a strong determination to maintain high prices, with sporadic small orders executed at the higher rates.

Yellow Phosphorus

Yellow phosphorus prices rose steadily this week, with mainstream ex-factory quotes reaching the high end of the year's range. Operating rates in key southwestern production areas remained stable, but spot supplies were tight; enterprises prioritized fulfilling long-term contracts, leading to higher external quotes for spot goods. Regional price differentials remained reasonable, and short-distance transport and circulation proceeded normally. Downstream buyers purchased according to need; amidst high prices, transactions were driven primarily by essential demand, with little speculative stockpiling.

Wet-Process Phosphoric Acid

As of June 11, the benchmark price for wet-process phosphoric acid on SunSirs reached 11,400.00 RMB/ton, marking a cumulative increase of 57.24% since the end of December 2025, with the upward trend continuing this week. Regionally, production areas in Sichuan-Chongqing and Yunnan-Guizhou maintained moderate ex-factory quotes due to raw material advantages, whereas delivered prices were higher in the deep-processing hubs of East and Central China. Squeezed by rising costs for both sulfur and phosphate rock, phosphoric acid producers continued to raise quotes, and actual transaction prices followed the upward trend of listed prices.

Overall, the industry chain this week exhibited a linked dynamic: phosphate rock prices provided a floor, yellow phosphorus prices rose in tandem, and phosphoric acid led the gains. There was a notable absence of low-priced stock across the entire chain, and regional price differentials remained consistent with norms influenced by logistics and supply structures.

II. Domestic Production, Operating Rates, and Supply Status

(i) Phosphate Rock

Effective domestic supply of phosphate rock remained tight. Domestic phosphate rock is characterized by a scarcity of high-grade ore and high extraction costs; compounded by strict safety and environmental regulations, small and medium-sized mines have continued to cut production or exit the market, while large mines prioritize long-term supply contracts, limiting the volume of spot goods released. While operating rates at mines in major production areas remained stable this week, the overall increase in capacity utilization was insufficient, resulting in weak short-term supply elasticity. Industry data indicates that the domestic phosphate rock market remains in a state of tight supply-demand balance for 2026; the long lead time for bringing new capacity online makes it difficult to bridge the supply gap in the short term, and long-term supply capabilities remain constrained, meaning the tight supply situation is unlikely to reverse soon.

(ii) Yellow Phosphorus

The overall operating rate of the yellow phosphorus industry remained stable this week, with few instances of major concentrated maintenance shutdowns. Driven by rising electricity and phosphate rock costs, producers showed little willingness to operate at full capacity, limiting overall production growth. Domestic yellow phosphorus capacity is highly concentrated, and major production units are operating stably, ensuring the fulfillment of routine orders; however, spot availability is limited. Coupled with continuous restocking by downstream buyers, the market is experiencing a distinct shortage of spot supply.

(iii) Wet-Process Phosphoric Acid

Operating rates for wet-process phosphoric acid facilities remained at medium-to-high levels, with most enterprises maintaining normal production schedules. However, the prices of raw materials—specifically sulfur and phosphate rock—have continued to rise, squeezing production margins. Consequently, some enterprises have adjusted their production schedules to mitigate the risks associated with high raw material costs, preventing any significant increase in total industry output. While domestic phosphoric acid production capacity is ample and overall supply capabilities remain stable, output growth is constrained by the limited supply of raw materials.

III. Port and Enterprise Inventory Status

Inventory levels across the supply chain remained low this week, serving as a key factor supporting prices.

Sulfur, a core raw material for phosphoric acid, saw a sharp decline in import volumes due to geopolitical tensions in the Middle East. Domestic port inventories are nearing lows, and the pace of raw material replenishment has slowed, directly driving up phosphoric acid production costs.

Phosphate rock distribution relies primarily on direct shipments from mines under long-term contracts; inventories held by traders and end-user factories remain low, as downstream enterprises purchase supplies on an as-needed basis rather than stockpiling.

Finished product inventories at yellow phosphorus enterprises are low, with priority given to fulfilling downstream long-term contracts, resulting in limited market circulation stock. Similarly, inventories at wet-process phosphoric acid plants and regional transit hubs remain at reasonably low levels, reflecting high inventory turnover efficiency.

There is no backlog of inventory across the supply chain, nor are there widespread shortages; however, the limited volume of spot goods available for circulation has further reinforced the market trend of firm pricing.

IV. Domestic and International Demand Landscape

This week, the supply chain benefited from dual demand drivers: essential agricultural needs and growth in the new energy sector. Both domestic and international demand remained robust.

Domestically, demand for phosphate fertilizers in the traditional agricultural sector remained steady. Following the conclusion of spring planting, demand for top-dressing fertilizers was released in an orderly manner, providing foundational support for phosphate rock and phosphoric acid markets. The new energy sector emerged as the core driver of growth; the energy storage and power battery industries sustained high production levels across the lithium iron phosphate (LFP) supply chain, maintaining high procurement volumes for raw materials like phosphoric acid and yellow phosphorus and exerting a strong pull on essential demand. Demand from other downstream sectors—such as chemicals, food processing, and electronics—remained stable, with purchasing conducted on an as-needed basis.

Internationally, overseas demand for phosphorus-based products remained steady, and the export of domestic phosphorus chemical products proceeded normally. Global attention on phosphorus resources has intensified, and overseas procurement demand has been released consistently. Export channels continue to absorb domestic supplies, keeping the global supply-demand balance tight without any instances of regional demand contraction or supply disruptions. V. Price Linkage Across the Supply Chain

This week, cost transmission along the industry chain proceeded smoothly from upstream to downstream, with the surge in upstream raw material prices serving as the primary market driver.

Sulfur—at the very top of the supply chain—saw a notable price surge. As of June 11, the spot price of sulfur stood at 9,684.33 yuan/tonne, marking a cumulative increase of 164.53% since the end of last December and reaching a historical high. my country relies heavily on sulfur imports, particularly from the Middle East; geopolitical conflicts have disrupted international shipping, leading to reduced import volumes and low port inventories. These factors have pushed sulfur prices steadily higher, directly and significantly raising the production costs of wet-process phosphoric acid.

Phosphate rock prices remained firm at high levels, driven by persistently high mining and environmental compliance costs. This established a price floor for yellow phosphorus and phosphoric acid; consequently, production costs for midstream yellow phosphorus rose in tandem, with market quotes adjusted upward to reflect raw material costs.

Downstream, products such as lithium iron phosphate (LFP) and phosphate fertilizers demonstrated the ability to pass on costs and showed a high tolerance for expensive raw materials, resulting in minimal negative feedback within the supply chain. Overall, a complete transmission chain emerged: a surge in sulfur prices drove up phosphoric acid prices, which in turn strengthened the markets for yellow phosphorus and phosphate rock, demonstrating tight linkage across the supply chain.

VI. Overview of April 2026 Import and Export Data

China’s reliance on imported phosphate rock is limited; import volumes remained stable in April, with little fluctuation in supplementary supplies from overseas. Yellow phosphorus is a product where China holds a competitive production advantage; export volumes remained normal, and overseas orders stayed steady. Import and export volumes for wet-process phosphoric acid and its derivatives were stable in April; imports consisted primarily of high-end refined products, while the country remained largely self-sufficient in standard-grade phosphoric acid. Sulfur, a key imported raw material, saw a decline in import volume in April compared to both the previous month and the same period last year. This confirms the tightening of overseas supply and served as a precursor to the price increases seen across the supply chain this week. Overall, foreign trade data reflects a pattern of pressure on upstream raw material imports alongside self-sufficiency in mid- and downstream products.

VII. Market Outlook

The fundamental drivers supporting this week's market trends are unlikely to shift rapidly. Tight phosphate rock supplies and low port inventories of sulfur persist; coupled with robust, dual demand from the agricultural and new energy sectors, prices for phosphate rock, yellow phosphorus, and phosphoric acid are expected to maintain a strong, fluctuating trend at elevated levels. While the momentum for sharp price surges has eased, the dual support of costs and demand makes a significant decline highly unlikely. The market is primarily undergoing consolidation at high levels; spot supplies remain tight, and actual transaction prices are more likely to rise than fall.

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