International sulfur price hit a record high of $800/MT in June but has slumped to $50 ~ 60/MT
currently. Domestic sulfur and sulfuric acid prices have tumbled to RMB500/MT, down 80% from
June and July.
Due to sulfur price slump, DAP and MAP prices slipped more than RMB1,000/MT in the last two
months, but sales remained dull. As phosphorus producers paid a high price for about 1.5 million
MT sulfur in the past, the cost of phosphorus is above the current phosphorus market price. For
instance, the production cost of DAP with 64% nutrient is more than RMB4,000/MT, but the
current producer’s DAP price is below RMB3,500/MT.
Subject to the slack season of phosphorus consumption and blocked exports, phosphorus market
is sluggish. According to the Phosphate Fertilizer Association, due to high raw material cost and
phosphorus market price decline, phosphorus industry may suffer a loss of RMB15.6 billion this
year. By comparison, the industry’s total profit was merely RMB7.65 billion in 2007. The
association has appealed to the government for subsidy and less control over phosphorus
exports.
