SMM analysis on China June iron phosphate output and July forecast

In June, China's iron phosphate production was 147,800 mt, down 10% MoM and up 21% YoY. The production in June significantly decreased, mainly due to downstream production cuts and destocking at the end of the quarter, as well as production cuts by iron phosphate companies due to cost pressures. On the cost side, the price of industrial ammonium stayed at a high level in June, and the price of phosphoric acid was also stable, keeping the cost of iron phosphate high. However, the price of iron phosphate remained stable in June, defying previous expectations for significant price increase. Supply side, iron phosphate companies, due to previous significant losses and limited demand in June, adopted a conservative approach to scheduled production, resulting in a significant decline in output. Demand side, the demand for iron phosphate in June also declined compared to May, which was consistent with previous expectations.