SunSirs: Monoammonium Phosphate (MAP) Guidance Price Adjusted Upward for the Fifth Time, Rising by 350

On the evening of last Friday (May 29), the China Phosphate and Compound Fertilizer Industry Association announced its latest product guidance prices. The guidance price for Monoammonium Phosphate (MAP) was raised by RMB 350 (per ton; all subsequent price figures refer to the per-ton rate); consequently, the ex-factory price for 55% grade MAP powder in Central China rose to RMB4,200. This price adjustment quickly became a focal point of attention within the industry. Moreover, this was not merely a short-term market anomaly, but rather a move driven by a confluence of factors, including escalating production costs and tightening supply.

The guidance price mechanism for MAP was officially introduced in mid-to-late May 2025, with the primary objective of ensuring supply stability and maintaining price equilibrium. Under the guidance of these policies, domestic market prices for MAP have generally remained stable, avoiding any drastic spikes. However, pressure from the raw material sector has become increasingly acute. Influenced by shifts in global supply and demand—as well as geopolitical developments in the Middle East—sulfur prices have repeatedly surged, reaching historic highs. This has significantly driven up production costs for phosphate fertilizer manufacturers, exacerbating the industry's ongoing financial losses. Since the beginning of 2025, MAP producers have been trapped in an operational predicament characterized by "rising raw material costs, stagnant selling prices, and widening losses."

From May 18, 2025, to the present, driven by continuously rising costs, the MAP guidance price has undergone a cumulative total of five adjustments (the 3,850-yuan price tier was not formally announced via official circulars, yet it was widely adopted and implemented by the market). As of May 29, 2026, the ex-factory guidance price for 55% grade MAP powder in Central China has been adjusted to RMB4,200—an increase of RMB350 over the previous adjustment, and a cumulative increase of RMB850 compared to the initial guidance price of 3,350 yuan. During this same period, sulfur prices surged by RMB4,860, driving up the comprehensive production cost of MAP by RMB2,085. The magnitude of the MAP price adjustments has lagged far behind the rise in production costs; based on current market prices for externally sourced raw materials, the industry's theoretical loss per ton has now approached RMB 1,500.

MAP manufacturers remain deeply mired in a cost crisis; the period of financial losses has now extended beyond one year, and the magnitude of these losses continues to widen. During the peak fertilizer application season in the spring, enterprises designated to ensure supply successfully fulfilled their quotas; however, their operations throughout this period were primarily driven by a strategy of sacrificing profit margins to maximize sales volume, resulting in a significant compression of overall industry profitability. Currently, pressure from the raw material sector continues to escalate; sulfur—a key input—not only remains prohibitively expensive but is also facing acute shortages and insufficient supply. Even though China's "Big Three" oil companies are supplying sulfur to phosphate fertilizer producers at parity prices, the majority of these supplies are in liquid form. Due to constraints on transportation radii, the physical delivery of these supplies to destination sites has been hindered, leaving most factories in a precarious position regarding raw material inventory. With raw material market prices remaining at persistently high levels, enterprises lacking inherent resource advantages have been compelled to suspend production one after another, while even the designated supply-assurance enterprises are maintaining low operating rates due to raw material shortages. As of May 28, the capacity utilization rate for the monoammonium phosphate (MAP) industry stood at a mere 44.53%, representing a month-on-month decline of 1.6 percentage points.

The downstream compound fertilizer market remains sluggish, characterized by weak demand for summer inventory replenishment and a general reluctance among end-users to purchase fertilizers; consequently, market demand remains difficult to stimulate. Most regions have adopted a "production-to-order" strategy; in some areas, companies have reduced operating rates or temporarily halted production due to insufficient demand, while only a few enterprises in Hubei and Henan provinces have slightly increased operating rates to build up inventory in preparation for future sales. The industry is currently struggling to break free from this "off-season" slump; demand for the autumn season is expected to be delayed, concentrating its release between late July and September, which will continue to suppress demand in the MAP market in the short term.

In summary, while the upward adjustment of the MAP guidance price has, to some extent, alleviated the operational pressures faced by manufacturers, the difficulty in securing low-cost raw materials for supply-assurance enterprises means that the industry's loss-making situation has yet to be reversed. The recent price adjustment largely aligns with current market realities; however, sluggish sales in the downstream compound fertilizer market, coupled with continuously rising production costs and low acceptance levels among end-users, mean that even covert price cuts and promotional offers have failed to stimulate purchasing enthusiasm. The renewed substantial increase in the MAP guidance price has further dampened the willingness of downstream buyers to procure goods and has intensified operational pressures on traders. In the short term, the MAP market is expected to remain relatively stable, albeit with narrow fluctuations, as factory quotations and actual market transaction prices gradually converge.

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