SunSirs: Monoammonium Phosphate: High Costs Weigh on the Market, Production Rates Fall

With the arrival of Lixia (the start of summer), the peak season for spring fertilizer use has officially drawn to a close. Recently, the domestic phosphate fertilizer market has been characterized by a tug-of-war between high costs and weakening demand. The price of sulphur, a key raw material, has continued to rise, placing significant cost pressure on downstream phosphate fertilizer manufacturers, leading to a gradual decline in production capacity utilization; whilst phosphate rock prices have remained stable overall, downstream buyers are already showing an intention to drive down prices. With the change of the solar term, the market is entering a period of seasonal adjustment.

The domestic monoammonium phosphate (MAP) market remains at elevated levels, though production capacity utilization has dropped markedly. As of early May, the prevailing price for 55% powdered MAP in Hubei stood at 4,200–4,250 RMB/ton, with most manufacturers suspending new orders to focus on fulfilling existing contracts. For supply-guaranteed enterprises, the price of 55% powdered MAP supplied to downstream factories was 3,850 RMB/ton. Regarding industrial-grade monoammonium phosphate, driven by raw material costs, the mainstream market price for 73% industrial-grade monoammonium phosphate has risen to 7,200–7,300 RMB/ton, with some high-end battery-grade 73% industrial monoammonium phosphate quoted at 7,500 RMB/ton, subject to individual negotiation.

The core characteristic of the current market lies in the intensifying contradiction between high costs and weak demand. Regarding raw materials, sulphur prices remain at elevated levels; phosphate rock prices are generally stable, with the tax-inclusive transaction price for 28% grade ship-side material in Hubei ranging from 980 to 1,000 RMB/ton, whilst prices in Sichuan, Guizhou and other regions remain steady. Affected by high sulphur prices, phosphate fertilizer enterprises are facing significant cost pressures; the number of enterprises reducing production capacity for maintenance after the holiday has increased, with the overall operating rate of the phosphate fertilizer sector now below 50%, and a downward trend is expected to continue. On the demand side, downstream compound fertilizer manufacturers and traders have shown limited willingness to accept high prices, maintaining only minimal purchases to meet essential needs. Overall, the monoammonium phosphate market is expected to remain at high levels in the short term, with close attention required to be paid to raw material price trends and changes in industry operating rates going forward.

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