Phosphoric Acid

Phosphoric Acid Market Dynamics Report – Recent Commodity Market Intelligence

I. Price Trends
- Overall Price: As of July 1, 2026, the market price for industrial-grade 85% phosphoric acid remains in a high-range oscillation. According to Shengyishe (Business Society) data, the benchmark price for phosphoric acid in July 2025 ranged between RMB 6,640–6,700 per metric ton; by July 2026, it had surged beyond RMB 9,000 per metric ton—a year-on-year increase of over 15%.
- Segment-Specific Trends: Wet-process phosphoric acid prices rose sharply—from RMB 6,800/ton in February 2026 to RMB 10,300/ton in early June 2026—representing a cumulative increase of over 51%. In contrast, thermal-process phosphoric acid prices edged up modestly, benefiting from smooth cost pass-through from raw materials; however, downstream acceptance remains limited.

II. Cost Drivers
- Phosphate Rock: Domestic 30%-grade phosphate rock prices have surpassed RMB 1,000/ton, rising 4% month-on-month. Global supply is tightening due to U.S. export restrictions under the Defense Production Act, while depletion of high-grade ore resources further intensifies cost pressure.
- Yellow Phosphorus: The prevailing transaction price for yellow phosphorus in Yunnan, Guizhou, and Sichuan provinces climbed from RMB 27,200–27,600/ton at end-2025 to RMB 30,000/ton in June 2026—an increase exceeding 7%. Safety incidents in Guizhou have further heightened supply anxiety.
- Sulphur and Sulfuric Acid: Geopolitical tensions in the Middle East have constrained global sulphur supply. Granular sulphur prices at Zhenjiang Port reached RMB 7,350/ton, up 3.4% week-on-week—directly elevating wet-process phosphoric acid production costs.

III. Supply-Demand Landscape
- Supply Side:
- Wet-process phosphoric acid producers, squeezed by soaring input costs, have resorted to maintenance shutdowns or load reductions, lowering the industry’s average operating rate to approximately 50%, significantly shrinking spot market availability.
- Thermal-process phosphoric acid producers raised their operating rate to 63.33%, yet remain cautious in ramping up capacity due to downstream resistance.
- Demand Side:
- The new energy sector has emerged as the primary growth engine: lithium iron phosphate (LFP) cathode material capacity stands at 5.945 million tons/year, with stable production utilization rates above 80%, fueling surging demand for phosphoric acid.
- Traditional phosphate fertilizer demand has entered its peak season; mainstream pricing for 55%-grade monoammonium phosphate (MAP) stands at RMB 3,100/ton—up over 14% year-on-year—though spring fertilizer preparation has exerted weaker upward pressure on prices compared to new energy demand.
- Traditional sectors—including metal surface treatment and refractory materials—are cutting procurement volumes amid cost pressures, with some enterprises actively seeking alternative materials.

IV. Regional Market Dynamics
- Hubei Province: Phosphoric acid prices remained stable in June 2026, supported by robust new-energy demand and resilient enterprise quotations.
- Sichuan Province: Prices were stable in June 2026, yet wet-process phosphoric acid producers face imminent production suspension risks due to sulphur shortages.
- Yunnan Province: Market conditions in June 2026 were impacted by safety incidents, tightening yellow phosphorus supply expectations and sustaining an upward pricing trend.

Analysis & Assessment
1. Strong Cost Support: Prices for key raw materials—including phosphate rock, yellow phosphorus, and sulphur—remain elevated across the board, establishing firm cost support that is unlikely to ease in the near term.
2. Tight Supply-Demand Balance: Robust new-energy demand persists, while low operating rates among wet-process producers constrain supply recovery, resulting in a structural supply deficit.
3. Escalating Regional Divergence: Resource-rich provinces such as Yunnan and Guizhou are leading price increases due to supply disruptions, whereas consumption hubs like Hubei and Sichuan experience lagged price transmission, partly attributable to logistics cost variations.

Outlook
1. Short Term (July–September 2026):
- Price Range: Industrial-grade 85% phosphoric acid is expected to trade within RMB 9,000–9,500/ton. Wet-process phosphoric acid will lead market gains, buoyed by strong new-energy order inflows.
- Key Drivers: “Golden September & Silver October” pre-stocking for new-energy vehicles; peak overseas energy storage exports; and gradual ramp-up of high-end capacity at leading enterprises—all contributing to sustained tight balance.
2. Medium Term (October–December 2026):
- Price Center: Prices are projected to moderate slightly to RMB 8,500–9,000/ton, though the full-year average price level will remain significantly higher than in 2025 and is unlikely to revert to prior lows.
- Critical Variables: Gradual commissioning and ramp-up of newly added phosphoric acid capacity; marginal easing in raw material costs; yet persistent constraints from phosphate rock scarcity and sustained demand from battery applications continue to anchor prices at elevated levels.
3. Long Term (2027 and Beyond):
- Industry Trends: The phosphoric acid industry is transitioning toward high-end, fine, and green development. Demand for ultra-high-purity grades—including electronic-grade and battery-grade phosphoric acid—is growing rapidly. Technological innovation and strategic control over resource assets will become core competitive advantages for enterprises.
- Price Outlook: Constrained by finite phosphate rock resources and continuously expanding new-energy demand, phosphoric acid’s intrinsic value is fundamentally bullish. Its long-term price equilibrium is likely to trend gradually upward.