Summary:
China’s phosphate economy is stretching from farm to EVs: DAP exports near 2 Mt/month with ~$700/t ASP and >65% ASEAN share; smart-ag and high-efficiency fertilizers scale. LFP shipments hit ~1.61 Mt (+68%) as high-end capacity ramps. Rock sits ~US$146/t; CBAM and sulfur (~US$366/t) pressure costs. India’s 6.8 Mt DAP tender beckons. Leaders pivot to bio-fermentation (≈20% cost cut) and electronic-grade phosphoric acid.
I. Agriculture — Export Boom and Green Upgrade in Parallel
1) Volume–value uptrend, ASEAN share above 65%
September remains the final window for concentrated export policy release (~60% of annual quota). China’s DAP (diammonium phosphate) monthly exports are expected to hold near 2.0 million tons in September. The August export ASP topped ~US$700/t, an 80%+ premium over the domestic market, with Vietnam, Thailand, and Ethiopia contributing most of the incremental demand. Leading producer Yuntianhua generated single-month export-driven net profit >US$0.42B, with exports accounting for ~70% of profit. Although OCP (Morocco) plans to lift 2025 capacity to 16.5 Mt/y, China’s integrated phosphate–sulfur cost advantage (~12% below OCP) supports >60% share in ASEAN.
2) Smart farming and high-efficiency fertilizers scale up
Yuntianhua’s “smart blending + drone spraying” service expanded across the Northeast corn belt, driving slow/controlled-release fertilizer sales +40% YoY and enabling a ~20% price premium. Kingenta’s polyphosphoric-acid liquid fertilizers surpassed 15% penetration in South China banana plantations, lifting P utilization to ~55%. In Shiyan, Hubei, 25 smart ag-equipment projects were signed in September totaling ~US$1.17B, spanning drones and smart irrigation to support high-efficiency fertilization for the autumn harvest.
II. New Energy — Materials Revolution and Faster Capacity Build-out
1) LFP demand boom; high-end capacity ramps
In 1H 2025, China’s LFP (lithium iron phosphate) shipments reached ~1.61 Mt (+68% YoY) as CATL and BYD accelerated phosphate sourcing. Pengbo New Materials’ 200 kt/y high-compaction LFP plant in Yangquan, Shanxi entered trial runs in mid-September, targeting 5th-gen LFP with compaction density ≥2.75 g/cm³. Longpan Tech’s Indonesia facility signed an ~US$0.85B LFP supply contract with CATL (157.5 kt over 2026–2031); Phase II (90 kt/y) is slated to start by year-end.
2) Resource race intensifies; overseas layouts deepen
Phosphate rock—a core raw material for new-energy materials—continues to gain strategic value. In 2025, 30%-grade rock holds near ~US$146/t (≈CNY 1,040/t). Yuntianhua, Guizhou Phosphate and peers are expanding reserves via mine acquisitions (e.g., Hubei Yihua acquiring Qiaogou Mining), and now collectively control ~15% of global reserves. CATL’s Hungary (100 GWh) and Spain (50 GWh) plants are accelerating, directly bolstering Europe’s LFP demand; by 2026, Europe’s share is expected to rise to ~25%.
III. Environment — Green Transition and Circular Economy Take Shape
1) Breakthroughs in phosphogypsum utilization
Guizhou Phosphate uses liquid-phase recrystallization to produce high-grade anhydrite, reducing total P and total F to <0.1%. With ~15 Mt/y capacity, it can replace calcium carbonate in plastics and packaging, and resource-use gains fully cover production costs. Xiangyun Co. is advancing a 1 Mt/y phosphogypsum harmless-treatment project (flotation purification + low-temperature calcination), finishing earthworks by late September; once online, it will treat ~1 Mt/y with ~95% resource-utilization rate.
2) Policy tailwinds for green upgrades
Sichuan’s “Yangtze River Basin Total Phosphorus Control Plan” targets 50% phosphogypsum utilization by 2025, pushing firms such as Chuanheng and Yuntu Holdings to speed adoption—adding ~US$11–14/t to DAP production costs (≈CNY 80–100/t). The EU CBAM pilot is expanding to phosphate chemicals; leaders like Yuntianhua cut carbon intensity via green power (hydropower >70%), achieving ~30% lower emissions per unit than the industry average.
IV. Market Signals — Risks and Opportunities
1) Cost pressure vs. emerging-market potential
Sulfur rose above ~US$366/t in September (≈CNY 2,600/t; +35% YoY), lifting DAP full cost to ~US$507/t (≈CNY 3,600/t) and nearing the current ex-works ~US$535/t (≈CNY 3,800/t). India launched FY 2025/26 phosphate tenders in September; DAP imports may reach ~6.8 Mt, with Chinese suppliers potentially taking ~40%. Meanwhile, Peru and Colombia are fast-tracking local phosphate-fertilizer builds—~6 Mt new capacity by 2030, which could divert part of China’s export growth over the long term.
2) Tech iteration and global scaling
Leaders such as CATL and Yuntianhua are shifting from resource-driven to technology-driven growth: replacing thermal processes with bio-fermentation (~20% cost reduction), developing electronic-grade phosphoric acid (≥99.99%), and moving up the value chain. As global phosphate-chemical supply chains restructure, China’s full-value-chain advantage positions its share in Southeast Asia and Africa to rise from ~58% in 2025 to ~70% by 2030.
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