Latest Update in the SMM Phosphorus Market

In 2025, the phosphorus chemical industry exhibited several key characteristics: sulfur price shocks, firm ore prices, increased environmental protection pressure, and new energy under pressure. Phosphate ore prices fluctuated at highs, with enterprise profits exceeding 100%. Sulfur prices doubled, and import dependency reached 50%, driving up downstream costs. The new energy sector, particularly LFP, accounted for nearly 10% of phosphate ore consumption, becoming the core growth driver. Looking ahead to 2026, phosphorus resource prices are expected to remain firm, pressure on enterprises without mines will intensify, and the industry will accelerate integration toward the "phosphate ore-phosphoric acid-cathode material" chain. High-end and green transformation is imperative.

In December 2025, emergency controls were activated due to air pollution in key phosphorus chemical industry areas of Hubei, such as Yichang and Jingmen, compounded by the Yangtze River Protection Policy. This led to 30% of small and medium-sized enterprises halting production, while leading companies cut production by 20%-30%. The supply of new energy raw materials, including industrial-grade monoammonium phosphate (MAP), which accounts for over 50% of the national total, tightened, providing short-term price support and continuing to increase costs for the new energy industry.

Recently, the special meeting on ensuring supply and stabilising prices for phosphate fertilizers and the release of Yuntianhua’s initiative aimed to stabilise the domestic fertilizer market for spring plowing. However, the underlying reality of "high sulfur prices" and the strong regulatory measures of "domestic priority and export restrictions" may have a significant impact on the new energy industry, particularly in the field of LFP batteries.

In October 2025, the phosphorus chemical industry operated against a backdrop of subdued traditional agricultural demand and robust new energy demand. The industry-wide production of phosphate ore (converted to P₂O₅ 30%) climbed to a record high of approximately 14 million mt, while the consumption index for the new energy sector rose to 6.2, with robust demand for products such as LFP being the primary driver.

In October 2025, the phosphorus chemical industry operated against a backdrop of subdued traditional agricultural demand and robust new energy demand. The industry-wide production of phosphate ore (converted to P₂O₅ 30%) climbed to a record high of approximately 14 million mt, while the consumption index for the new energy sector rose to 6.2, with robust demand for products such as LFP being the primary driver.

Monthly phosphate ore supply and demand maintained a tight balance, with prices stabilizing at a high level of around 1,000 yuan. The proportion of new energy demand rose to 6%-7%, but overcapacity in midstream materials such as LFP led to price pressure. Enterprises accelerated their deployment of phosphate ore resources and new solid-state battery

In the first half of 2025 (H1), the phosphorus chemical industry experienced significant price fluctuations and capacity adjustments, primarily influenced by factors such as the global economic situation, raw material supply, and the growth in demand for new energy. On the demand side, the consumption of phosphorus resources in the new energy industry continued to increase. The usage of phosphoric acid and industrial-grade monoammonium phosphate (MAP) in the cathode material lithium iron phosphate (LFP) industry, as well as the application of yellow phosphorus in the main raw material LiPF6 for electrolytes, all saw substantial increases compared to the same period last year.

[SMM Analysis: Review and Outlook of Phosphorus Chemical Industry in H1 2025] In the first half of 2025, the phosphorus chemical industry experienced significant price fluctuations and capacity adjustments, mainly influenced by factors such as the global economic situation, raw material supply, and growth in new energy demand. On the demand side, the consumption of phosphorus resources in the new energy industry continued to increase. The usage of phosphoric acid and industrial-grade monoammonium phosphate (MAP) in the cathode material LFP industry, as well as the usage of yellow phosphorus in the production of LiPF6, the main raw material for electrolytes, both saw substantial increases compared to the same period last year.