Sulfur Prices Drop Sharply; Phosphate Fertilizer Prices Consolidate at High Levels

I. Price Indices and Regional Quotes to Mainstream Varieties

(I) Monoammonium Phosphate (MAP)

Regarding prices, quotes to various MAP grades showed mixed movements on June 15. The price index to 55% powdered MAP stood at 4,370.00, up 0.14% from the previous trading day; the index to 55% granular MAP was 4,450.00, a single-day increase of 1.14%; and the index to 58% powdered MAP remained flat.

Regionally, quotes showed a direction of stability with some increases: In East China (Anhui, Shandong, and Jiangsu), mainstream quotes to 55% powdered MAP remained stable at 4,450–4,500 RMB/ton, 4,450–4,550 RMB/ton, and 4,430–4,480 RMB/ton, respectively. Trends in Central China diverged: prices to 55% powdered and granular MAP in Hubei rose by 50 RMB/ton and 100 RMB/ton respectively, while quotes in Henan remained stable. In Southwest China, the price to 55% powdered MAP in Yunnan rose by 50 RMB/ton, while quotes in Sichuan remained unchanged. In Northeast China (Bayuquan), the quote to 55% powdered MAP held steady at 4,250 RMB/ton. Currently, actual market transactions are mostly negotiated on a case-by-case basis, with traders tentatively raising their quoted prices.

(II) Diammonium Phosphate (DAP)

On June 15, the DAP market was characterized by a "wait-and-see" consolidation phase, with prices edging upward. The price index to 64% granular DAP stood at 4413.33, up 0.19% month-on-month; the index to 60% brown DAP remained flat; and the index to 57% DAP rose by 0.58%.

Regarding regional transaction prices, quotes to various DAP grades in the Northwest (Gansu and Shaanxi) remained stable. In North China (Hebei), prices to 57% natural-color and brown DAP held steady. In East China (Shandong), the price to 64% granular DAP rose by 50 RMB/ton and 57% brown DAP by 30 RMB/ton, while quotes in Jiangsu remained stable. Quotes to 64% granular DAP in Central China (Hubei) held steady, and prices to 64% granular items in Northeast China (Heilongjiang) saw no change. Overall regional price differentials remained reasonable; while there were minor localized price corrections, no widespread price adjustments occurred.

II. Enterprise Shipments and Supply Situation

Yesterday, most domestic phosphate fertilizer producers continued to prioritize the delivery of previously signed orders; major vegetation suspended quoting and accepting new orders, and the supply of spot goods available to circulation remained tight. Constrained by supply limitations, market players maintained a firm stance on pricing, with traders actively raising quotes, though downstream follow-through remained limited. The phosphate fertilizer sector's overall operating rate remained at a moderate level, with no extensive maintenance shutdowns or significant production restarts; the tight supply-demand stability is expected to persist in the short term.

III. Upstream and Downstream Raw Material Trends

Raw material trends showed significant divergence, exerting a mixed impact on the phosphate fertilizer market. Regarding the core raw material—sulfur—bearish sentiment intensified following the agreement between the US and Iran to keep the Strait of Hormuz open, causing prices to plummet yesterday. Specifically, prices to granular and lump/powder sulfur at Zhenjiang Port dropped by 1,950 RMB/ton (a decline of over 17%), and prices at Dafeng Port saw a similar sharp decline. Meanwhile, prices to solid and fluid sulfur in East China remained stable, while sulfur prices in Shandong, North China, and Central China showed mixed movements. Despite the pullback in sulfur prices, port inventories remain at multi-year lows, providing continued support from the supply side.

Beyond sulfur, the sulfuric acid market is fluctuating at high levels, with prices continuing to rise in certain regions; phosphate rock prices remain firm at high levels. Consequently, the combined cost of the three major raw materials remains elevated, offering no substantial relief from cost pressures to phosphate fertilizer producers and limiting the possible to price declines.

IV. Downstream Demand Performance

Currently, the domestic phosphate fertilizer market is in a traditional off-season, with preparations to autumn planting yet to begin. Operating rates at compound fertilizer vegetation remain low, and procurement strategies focus on replenishing stock based on immediate needs rather than extensive, centralized purchasing. regional distributors are adopting a wait-and-see approach with little enthusiasm to stocking up; overall market trading is sluggish, consisting mainly of small, sporadic orders. Weak demand is failing to drive sustained price increases, acting as a primary constraint on market development.

V. Market Outlook

In summary, the phosphate fertilizer market is currently characterized by high costs, tight supply, and lackluster demand. While the immediate drop in sulfur prices might dampen bullish sentiment, the sustained high prices of phosphate rock and sulfuric acid—combined with tight spot supplies—make a sharp decline in phosphate fertilizer prices unlikely; the market is expected to maintain a pattern of high-level fluctuation and consolidation. Moving forward, it is essential to monitor international geopolitical developments and price trends to raw materials like sulfur and sulfuric acid, while also tracking the recovery of compound fertilizer production and the timing of autumn stocking activities. These factors will dictate the future price trajectory of phosphate fertilizers.