SunSirs: Sulfur Prices Continue to Strengthen, While MAP Demand Lacks Substantial Support

According to China Chemical News, cost factors continue to drive the domestic monoammonium phosphate (MAP) market, with prices maintaining a firm upward trend. Upstream phosphate rock prices remain stable, while sulfur and sulfuric acid prices persist at elevated levels, keeping production costs high. Some plants have reduced output for maintenance, leading to a slight decline in industry operating rates. Downstream compound fertilizer producers remain cautious about chasing higher prices, primarily purchasing on-demand. Agricultural end-demand has yet to materialize in concentrated volumes, and distributors maintain conservative inventory levels. With limited support from essential demand, the market reflects a tug-of-war between strong cost support and weak demand follow-through.

Entering November, rising raw material costs drove synchronous increases in MAP prices, accumulating gains of RMB200-250 per ton. As of November 21, key domestic production regions quoted: Hubei 55% powder ex-factory at ¥3600-3650, Henan: 55% powder ex-factory at ¥3,670; Southwest region: 55% powder mainstream ex-factory at ¥3,600–3,700. Current market sentiment is heavily cautious, with actual transactions primarily negotiated. Cost-side increases have been more aggressive: raw material sulfur (granular, self-pickup at Yangtze River port) rose ¥525 since early month to ¥3,985, a 15.17% increase; Hubei sulfuric acid delivered prices averaged ¥970, up ¥205 or 26.8%. Corresponding MAP production costs increased by ¥222 and ¥293 respectively. MAP price increases have consistently failed to keep pace with rising costs, maintaining pressure on producers.

In November, domestic MAP producers experienced fluctuating order volumes. During the MAP conference early in the month, sustained raw material price hikes and surging cost pressures fueled concentrated bullish sentiment. This was compounded by ongoing autumn demand in East China, follow-up purchases from some downstream buyers, and post-conference guidance price increases, collectively driving MAP prices upward. However, the rapid price hike simultaneously dampened downstream purchasing momentum, with the market sustaining only essential procurement. As raw material costs like sulfur and sulfuric acid continued to strengthen, the cost support for MAP became increasingly robust, clarifying the market trajectory. At this point, some Northeast compound fertilizer enterprises with insufficient raw material inventories entered a production preparation phase, necessitating procurement. This drove a significant increase in new orders for major manufacturers, leading to a substantial accumulation of pending shipments. By the third week of November, the backlog of shipments for sample MAP enterprises reached approximately 485,000 tons, an increase of 170,000 tons compared to the previous week.

Currently, domestic MAP producers are primarily fulfilling existing backlog orders, with order schedules extending through the end of this month or into next month. New orders remain limited due to high prices. Meanwhile, rising raw material costs continue to squeeze profit margins, forcing some enterprises to reduce production. Additionally, several plants have entered scheduled maintenance phases, leading to a concurrent decline in industry capacity utilization. As of November 20, the domestic MAP industry's capacity utilization rate stood at 53.05%, down 2.57 percentage points month-on-month and 6.52 percentage points year-on-year. Production cuts were particularly concentrated in Hubei Province, where local plant operating rates fell 3.12 percentage points month-on-month.

Overall, cost factors will continue to support MAP prices in the short term. However, with no substantial demand-side catalysts and ongoing market supply-demand dynamics, MAP prices are expected to remain range-bound. Key factors to monitor include raw material price fluctuations, the pace of recovery in compound fertilizer plant operations, and the onset of agricultural fertilizer demand.

As an integrated internet platform providing benchmark prices, on November 27, the benchmark price of monoammonium phosphate on the business information platform was 3,690.00 RMB/ton, an increase of 9.71% compared with the beginning of the month (3,363.33RMB/ton).

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Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

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