In June 2026, the phosphorus chemical industry chain underwent a profound round of repricing under extreme cost pressures. Four keywords — "Surge, Hold, Strain, Expand" — capture the full-month landscape.

Sulfur surges is the core narrative of the month. Driven by US-Iran geopolitical tensions and declining global refinery by-product output, sulfur prices broke through the CNY 10,000/ton barrier, with year-to-date cumulative gains exceeding 257%. Wengfu's wet-process 85% phosphoric acid was repriced twice within half a month to CNY 12,100/ton, with cost pressures cascading down the industry chain.

Phosphate rock holds firm, demonstrating the scarcity-driven resilience of the resource end. 30% grade ore maintained prices above CNY 1,000/ton, with Sichuan and Hubei markets stuck in a "quoted but illiquid" standoff. Mining companies showed strong price-support willingness — even as downstream low operating rates suppressed shipment volumes, prices remained firm. The resource attributes of phosphate rock continue to strengthen following its inclusion in China's national strategic minerals list.

Fertilizers struggle as the biggest pressure point under cost shocks. Sulfur accounts for over 60% of MAP production costs, with per-ton losses on MAP approaching CNY 2,000. Multiple enterprises in Hubei were forced to shut down, pushing industry operating rates to just 30-40%. Although guideline prices were raised twice, they fell far short of covering cost increases, and the outlook for the autumn season remains far from optimistic.

New materials expand as the structural bright spot amid adversity. LFP operating rates reached 90%, driving iron phosphate prices higher against the trend. Xinyangfeng's CNY 3.2 billion fine phosphorus chemical project landed in Zhongxiang, and Yuntianchua announced a CNY 2.7 billion phosphogypsum co-production project — leading enterprises are accelerating their extension into new energy materials, making the "K-shaped divergence" increasingly clear.

I. Monthly Market Recap

II. Cost Side: Sulfur as the Core Variable

Sulfur prices have broken through CNY 10,000/ton with further upside potential, driven by uncertainty over the Strait of Hormuz shipping corridor.

Yuntianchua's three-pronged response:

1. Product mix adjustment — Increase output of urea, new compound fertilizers, feed-grade calcium phosphate, new energy materials, and polyoxymethylene to improve margins

2. Lean cost reduction — Centralized procurement, extended equipment run cycles, energy savings, and optimized financial management

3. Diversified sourcing — Utilizing strategic sulfur stockpiles to regulate procurement costs; expanding sourcing channels beyond the Middle East; increasing domestic smelting acid purchases

Multiple phosphorus fertilizer enterprises in Hubei have shut down, with low operating rates in turn suppressing phosphate rock shipment volumes.

Sulfur tightness is unlikely to resolve in the short term → cost centers for phosphoric acid and yellow phosphorus are shifting upward.

III. Capacity & Projects: Continued Investment in Phosphate Rock Resources

Capacity Landscape

New Projects

• Yuntianchua Wanchang Mine — 10 million tons/year; mining rights obtained; planned beneficiation to produce high-grade phosphate concentrate for LFP and other new energy materials

• Tonghua Group Dongda Mining — Lianhua mining area received mining permit; new 1.5 million tons/year capacity; total capacity rises to 2.3 million tons/year

• Shudao Mining Huangjiaping — Exploration permit obtained; Sichuan's newly discovered major phosphate resource

Resource Reserves

• Hebang Biotechnology — Confirmed ~624 million tons of phosphate rock resources (including Australia's Wonarah open-pit mine); 25,000 tons/year yellow phosphorus capacity quota

Phosphogypsum Valorization: Solid Waste → Resource

• Yihua Chuxing — 1 million tons/year phosphogypsum → 400,000 tons/year sulfuric acid; contract signed June 22

• Yuntianchua — CNY 2.7 billion phosphogypsum co-production project (sulfuric acid + cement); announced June 8

IV. New Energy Materials Extension: Phosphorus Chemicals → Iron Phosphate → LFP Chain

• Xinyangfeng's CNY 3.2 billion project includes 100,000 tons/year iron phosphate, located in Zhongxiang Hujii Chemical Park — building a circular economy chain covering "mining & beneficiation → phosphate fertilizers → fine chemicals → new energy materials → solid waste recycling"

• Yuntianchua Wanchang mine explicitly designated for iron phosphate / LFP downstream integration

• Wengfu's phosphoric acid price hikes are pushing up iron phosphate production costs

Cost Transmission Logic

Sulfur ↑ → Phosphoric acid ↑ → Iron phosphate cost ↑ → Price support for LFP

LFP operating rates remain at ~90%, with strong demand pulling iron phosphate supply tight. Companies with integrated "mine–acid–iron phosphate" layouts will gain significant cost advantages.

V. Logistics & Trade

New Transport Corridor

The "Leibo–Yichang" rail-water intermodal corridor was officially opened on June 24. The first batch of 700 tons of phosphate rock traveled from Sichuan's Leibo County by rail to Yibin Port, then "straight from train to ship" along the Yangtze River golden waterway to Yichang. Backed by Chongqing Shipping Group's regular liner service capacity, this represents another systematic upgrade to the upper Yangtze phosphate rock export logistics, following Yibin Port's 5 million tons/year handling capacity achievement in 2025.

Phosphate Rock Trade (May 2026)

Guizhou and Hubei, which had zero exports in April, fully resumed exports in May. Egyptian-sourced imports saw a significant share rebound.

VI. Market Outlook

Phosphate Rock

Tight balance unlikely to shift in the short term. 30% grade ore around CNY 1,000+/ton remains the main tone. However, downstream low operating rates are already suppressing ore demand, and regional price divergence may intensify.

Yellow Phosphorus

Upside potential remains at elevated levels, but high prices are already dampening downstream purchasing appetite. Supply-side policies strictly restrict new capacity additions; the tight supply-demand balance is expected to persist in the medium term.

Phosphate Fertilizers

Cost inversion coexists with low operating rates. Autumn compound fertilizer prices are set for a higher baseline, but demand is unlikely to surge quickly — high-level range-bound trading is expected.

New Energy Materials

Under high LFP production scheduling, iron phosphate's tight supply-demand balance is unlikely to ease in the short term. Iron phosphate prices still have upside support, but vigilance is needed on potential cost-side loosening if sulfur prices retreat.

Overall Assessment

The June phosphorus chemical industry chain was hit by extreme cost shocks, with traditional sectors and new energy industries showing clear divergence. The resource end (phosphate rock) maintained strength through scarcity attributes, the new energy materials segment expanded against the trend on high-demand momentum, while the traditional phosphate fertilizer sector emerged as the biggest pressure point under cost shocks. This divergent pattern is unlikely to reverse in the short term — the "K-shaped divergence" in the phosphorus chemical industry will persist.

VII. Key Focus: Geopolitics

Watch items:

• US-Iran negotiations (sulfur shipping corridor)

• Phosphogypsum-to-sulfuric-acid projects (sulfur substitution effect)

• New iron phosphate capacity driving phosphoric acid demand

Sulfur: US-Iran negotiations remain the single biggest variable. If shipping corridors are restored, sulfur prices could see further declines; if talks collapse, sulfur prices will inevitably continue to rally. Under either scenario, a return to year-start levels is unlikely in the short term.

Note: If you have any further details to add regarding the points mentioned in this article, or if you have any questions on the phosphorus chemical industry (phosphate rock, phosphoric acid, iron phosphate, lithium iron phosphate, etc.) and solid-state batteries, please feel free to contact:

Tel: 021-20707860 (or add WeChat: 13585549799) – Yang Chaoxing. Thank you!