SunSirs: Ammonium Sulfate: Mandatory Inspection Policy Reshapes Price Spread; Domestic Sales Under Pressure While Exports Face Obstacles

Since late July, the mandatory export inspection policy for ammonium sulfate—implemented on July 16—has continued to dictate domestic spot market trends. Over the past two days, quotes across major domestic production regions have continued to slide rapidly, creating a stark contrast between the domestic and international markets. By analyzing first-half customs data, upstream and downstream raw material prices, domestic supply-demand and inventory levels, and overseas demand patterns, one can fully map out the underlying transmission logic driving this market volatility.

In the last two days, the center of gravity for domestic market transactions has continued to shift downward. For coking-grade ammonium sulfate—the mainstream product in circulation—ex-factory quotes in key Shandong production areas have stabilized between 700 and 730 RMB/ton; this represents a cumulative drop of over 19% from the year's peak and a 34% decline year-on-year. Supply is plentiful in the coking hubs of North China, with transaction prices ranging from 710 to 740 RMB/ton, while in East China—a key sales region—delivered prices stand at 750–780 RMB/ton, reflecting a logistics premium. High-purity ammonium sulfate, a byproduct of caprolactam production, commands a higher price (780–820 RMB/ton) due to lower impurity levels, maintaining a stable price spread against coking-grade material. Meanwhile, with export channels restricted, processing plants have proactively cut granulation capacity, causing quotes for granular product orders to soften in tandem.

On the supply side, ammonium sulfate is entirely a byproduct of the coking and caprolactam industries; there is no dynamic of independent production units starting up or shutting down. Operating rates in the domestic coke industry remain steady, and while caprolactam units undergo periodic maintenance, overall output remains stable. National monthly commercial output of ammonium sulfate remains in the range of ten million tons, ensuring a steady flow of byproduct supply. With export channels narrowed and no alternative outlets for overseas sales, large volumes of product are backing up within the domestic supply chain. Port inventories continue to accumulate; recently, the volume of agricultural input arrivals at ports in East and North China has significantly exceeded outbound shipments. Traders show little willingness to stockpile, purchasing only small quantities on an as-needed basis. Inventory turnover cycles have lengthened, and pressure is being transmitted upstream to manufacturers, making price concessions to move stock the prevailing strategy.

Domestic demand remains generally weak. Ammonium sulfate consumption is split between agricultural nitrogen fertilizer and industrial additives. Currently, the agricultural sector is in the summer off-season; demand for top-dressing crops has largely concluded, and compound fertilizer plants are operating at low rates, limiting their procurement of low-priced ammonium sulfate raw materials. On the industrial side, consumption for water treatment, food processing, and feed additives accounts for a small share and cannot absorb the large surplus of by-product supplies. Overall market demand is fragile, resulting in a stalemate characterized by frequent inquiries but few actual orders; mid- and downstream channels are generally adopting a wait-and-see approach, holding off on bulk restocking until the full implementation details of the statutory inspection requirements are finalized.

Comprehensive customs data shows that cumulative domestic ammonium sulfate exports reached 10.1745 million tons from January to June 2026, a year-on-year increase of 15.1%, with 1.8 million tons exported in June alone. Exports remained robust throughout the first half of the year, driven by key overseas markets such as Brazil, Vietnam, Indonesia, and Turkey—with Brazil consistently ranking as the top importer. The second half of the year is traditionally the peak season for overseas procurement of granular fertilizer. In 2025, total ammonium sulfate exports reached 21.36 million tons; domestic products accounted for nearly 90% of global trade share, and the industry's export dependency was similarly high, relying heavily on overseas markets to absorb surplus by-product supplies.

The trade landscape shifted fundamentally after July 16. The introduction of mandatory statutory inspections for exports eliminated the previous inspection-exemption clearance model; all export goods now require parameter testing and must await customs clearance. This has extended inspection times and raised clearance costs, causing a widespread slowdown in export activity among small and medium-sized traders. Granular fertilizer orders originally destined for South America were forced to be postponed or diverted to the domestic market, while overseas buyers grew increasingly cautious. Export shipment volumes dropped sharply in the latter half of July compared to the previous period, effectively nullifying the factors that had driven high export growth in the first half of the year. Import volumes have remained consistently low, with only sporadic arrivals of small quantities of high-purity industrial-grade ammonium sulfate, having virtually no impact on the overall domestic supply-demand balance.

Upstream raw materials impose tiered cost constraints; sulfur prices remained high throughout the first half of the year due to shipping disruptions in the Middle East. Although prices retreated slightly in late July as port arrivals increased, the average price for 98% industrial-grade sulfuric acid held steady at around 2,040 RMB/ton. High acid-production costs associated with coking and caprolactam processes indirectly raised the allocated costs for ammonium sulfate by-products. Regarding nitrogen fertilizers, domestic and international price trends for the benchmark product—urea—have diverged; international urea prices rose due to geopolitical factors, while domestic urea remained in the summer off-season, fluctuating narrowly around 1,820 RMB/ton. Low domestic urea prices further eroded the relative price advantage of ammonium sulfate, leading agricultural supply channels to favor urea and diverting demand away from ammonium sulfate.

In the midstream sector, supply and demand dynamics have created a feedback loop: tightened export channels forced supplies back into the domestic market, where increased supply—combined with seasonal low demand—directly depressed spot prices. Downstream demand for compound fertilizers and industrial additives remained weak; compound fertilizer producers prioritized cost-cutting by driving down purchase prices rather than passing raw material cost pressures upstream. Consequently, the entire supply chain became trapped in a negative cycle characterized by rigid upstream costs, a surplus and price decline of intermediate products, and sluggish downstream demand. High-purity ammonium sulfate (a caprolactam by-product) experienced a much smaller price drop than coking by-products due to its low impurity levels and suitability for high-end industrial applications, further widening the price gap between the different product grades.

Overseas demand remains robust; South America and Southeast Asia entered their fertilizer preparation cycles for grain planting in the second half of the year, ensuring steady demand for granular ammonium sulfate. Current CFR quotes for granular product in Brazil range from $230 to $250 per tonne; based on the unit price of nitrogen, ammonium sulfate is priced higher than urea in the same region, yet overseas purchasing demand persists. However, domestic export inspection policies have extended delivery lead times, preventing overseas buyers from reliably securing Chinese supplies; consequently, some purchasers have slightly shifted toward niche sources in other regions. Meanwhile, global FOB spot prices for ammonium sulfate have risen in tandem, creating a significant price divergence between domestic and international markets—a gap characterized by high overseas prices versus low domestic prices that continues to widen.

There is no new overseas production capacity in the short term, and output of by-product ammonium sulfate from European and American chemical industries remains limited; global trade thus remains heavily reliant on Chinese supplies, with customs clearance hurdles caused by inspection policies driving up international spot premiums. While overseas buyers might gradually adjust procurement channels if Chinese exports remain restricted in the medium to long term, there is no large-scale alternative supply available in the short term, making it difficult to quickly shift essential overseas demand elsewhere.

The market's core short-term issue is the domestic supply surplus resulting from export inspection policies. Spot prices have remained low over the past two days; with the dual pressure of inventory accumulation and the off-season for end-user demand, there is insufficient momentum for a price rebound. Relief from domestic supply pressure depends on the finalization of specific customs clearance rules and the resumption of export shipment volumes. In the medium to long term, overseas demand for autumn fertilizer stockpiling provides stable support; if customs procedures are streamlined and export orders recover, the domestic supply backlog could be redistributed, offering room for a market correction. Conversely, if inspection times remain protracted, the domestic market will face a prolonged oversupply, keeping ammonium sulfate prices low and range-bound.

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