SunSirs: Sulfur Prices Surpass the 6,000 Yuan Mark, Driving Up Monoammonium Phosphate Production Costs

Since March, the price of sulfur, a key raw material, has surged significantly, with a monthly increase exceeding 43% and repeatedly hitting new highs. Coupled with the simultaneous rise in sulfuric acid prices, this has sharply driven up the production costs of monoammonium phosphate. Although costs provide clear support for prices, the market rally has been constrained by policy adjustments and weak downstream demand, causing the monoammonium phosphate market to enter a phase of high-level consolidation.

In March, the domestic monoammonium phosphate market followed a pattern of initial gains followed by stabilization, with prices consolidating at high levels. Prices rose by approximately RMB200 (per ton, same below) over the month. In Hubei, the mainstream ex-factory price for 55% powdered monoammonium phosphate ranged from RMB 3,850 to 4,050, with peak prices reaching RMB4,100.

At the beginning of the month, influenced by geopolitical tensions in the Middle East, sulfur prices rose rapidly, significantly increasing production costs. Many manufacturers suspended price quotations and held back on sales, tightening market supply. Downstream buyers’ urgent restocking needs drove prices upward. By mid-month, as sulfur and sulfuric acid prices continued to climb, coupled with rising freight costs, cost pressures on manufacturers intensified. Limited order acceptance supported further price increases. In mid-to-late March, with sulfur prices nearing RMB 6,00, manufacturers’ quoted prices surged to RMB 4,000–4,100; however, downstream buyers remained cautious about chasing higher prices, resulting in weak transaction volumes at these elevated levels.

In the fourth week of March, following industry meetings on supply assurance and price stabilization, regulatory measures in the domestic monoammonium phosphate market were further strengthened. Price caps for monoammonium phosphate were implemented, and key supply-guaranteeing enterprises successively adjusted their ex-factory prices back to previous levels. Leading enterprises lowered their prices to RMB 3,850, quickly dampening the previously rapid market rally. At the same time, news of adjustments to legal inspection requirements for fertilizer exports was released, and export restrictions continued to tighten, causing market bullish sentiment to cool significantly. Under the combined effect of multiple policies, monoammonium phosphate market quotes retreated after surging to a stage high, with downstream inquiries and follow-up orders becoming less active, effectively curbing the overall upward trend.

On the cost side, the domestic sulfur spot market experienced a one-sided, strong upward trend in March. As of March 27, the spot transaction price for sulfur at Zhenjiang Port stood at RMB 5,850, up RMB1,750 from the end of February—a 43.68% increase. By the end of March, the upward momentum in port sulfur prices had not yet subsided. On March 30, the sulfur price at Zhenjiang Port had surged to RMB 6,100, representing an increase of over 48% from the beginning of the month. Based on theoretical cost calculations, the 1,750-yuan monthly increase in sulfur prices translates to an approximate 788-yuan rise in monoammonium phosphate production costs. Regarding sulfuric acid, the delivered price in Hubei Province rose by RMB 290 during the month, contributing to an approximate 435-yuan increase in monoammonium phosphate production costs. In contrast, the price of monoammonium phosphate has risen by only RMB 200 this month, further significantly compressing the current profit margins of manufacturers and intensifying cost pressures.

Currently, overall operating rates at domestic monoammonium phosphate enterprises remain at relatively high levels. As of March 26, the industry’s capacity utilization rate stood at 69.57%, a slight decrease of 0.79 percentage points month-on-month but an increase of 9.09 percentage points year-on-year. Leading enterprises are operating at high capacity to ensure supply, and facilities that were shut down for maintenance before the Spring Festival have gradually resumed operations in March. Market supply remained relatively ample throughout the month. However, due to cost inversion, an increasing number of small and medium-sized factories are undergoing maintenance or suspending production, which will gradually reduce the supply of monoammonium phosphate.

On the demand side, downstream compound fertilizer enterprises focused primarily on spring fertilizer production in March, purchasing monoammonium phosphate on an as-needed basis. Although industry operating rates continued to recover, constrained by high raw material prices, most enterprises maintained only essential restocking and did not engage in concentrated stockpiling, resulting in a generally slow transaction pace.

Looking ahead, with ongoing tensions in the Middle East, tight shipping schedules for sulfur, and declining port inventories—combined with phosphate fertilizer producers prioritizing supply and production, as well as support from long-term contract restocking—domestic sulfur prices are expected to have further upside potential in April. For sulfuric acid, driven by high raw material costs, regional supply disparities, and support from downstream essential demand, the price center is expected to continue rising in April. It is reported that maintenance shutdowns for monoammonium phosphate (MAP) facilities in April currently involve four plants. As losses deepen, production in Hubei and Southwest China is expected to decline, and some small and medium-sized plants may gradually reduce or suspend production. Overall, the total domestic supply of MAP is projected to decrease significantly. On the demand side, the spring fertilization season is gradually coming to an end, with demand in Northeast China winding down. Demand for monoammonium phosphate is weakening due to the production of high-nitrogen fertilizers for the summer season, and downstream buyers are primarily purchasing on an as-needed basis.

Overall, while monoammonium phosphate is supported by strong cost fundamentals and tightening supply, the onset of the off-season and ongoing policy adjustments limit the momentum for significant price increases. The market is expected to remain range-bound at elevated levels.

As an integrated internet platform providing benchmark prices, on March 31, SunSirs' benchmark price for sulfur stood at 5,726.67 RMB/ton, representing a 46.46% increase compared to the beginning of the month (3,910.00 RMB /ton). Meanwhile, the benchmark price for monoammonium phosphate was 4,096.67 RMB /ton, up 5.31% from the start of the month (3,890.00 RMB /ton).

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