Costs Locked In — MKP Market Shifts into a “Time-for-Space” Phase
Since February 2026, the phosphate industry has entered a clear cost-driven upcycle. From a pricing perspective, all key products along the chain have moved up significantly:
- Sulfur: from around RMB 5,200/mt to RMB 6,800/mt, reaching a historical high
- Yellow phosphorus: from RMB 23,000/mt to RMB 29,000/mt
- MKP (crystalline, EXW): from RMB 8,100/mt to RMB 11,000/mt
This is not a single-product move. It is a full cost push from sulfur to phosphoric acid and further down to phosphate salts.
- Cost Side: Firm Support, No Short-Term Relief
The situation on the cost side is straightforward. Costs are no longer “rising” — they are already at a high level and holding there. Sulfur, as the starting point, has moved into a historically high range. Yellow phosphorus and phosphoric acid have followed, leaving very limited room for cost reduction in the middle of the chain. From a production standpoint, there is no clear sign that this pressure will ease before June.
In simple terms: MKP prices are supported by cost, not by market sentiment.
- Demand Side: Slower Pace, More Controlled Buying
At the same time, the market is adjusting. Price increases have been faster than what most buyers expected, and this is changing how purchasing decisions are made.
What we see in the market now:
- Buying pace has slowed down
- Purchasing has shifted from forward buying to hand-to-mouth
- Some traders are releasing inventory or working through existing stock
The market is moving from bulk restocking to demand-based purchasing. It is a rebalancing process, not a collapse in demand. MKP remains a necessity product. Demand is still there — only the timing has changed.
- Supply Side: Producers Have Options
One important point that should not be overlooked:
Producers are not dependent on the fertilizer market alone. With strong demand from the new energy sector (such as LFP and related phosphate materials), producers can adjust output allocation if fertilizer sales slow down.
This means: Supply is not under pressure to reduce prices.
- Market Structure: Strong Costs vs Cautious Buying
The current market is not simply bullish or bearish. It is a structural situation:
- Upstream: high costs, firm support, and no willingness to move down
- Downstream: more cautious, shifting to on-demand purchasing
The result is a typical situation: Prices hold, but transactions move slower.
- Outlook: Adjustment by Time, Not by Price
Under the current structure, the short-term direction is relatively clear.Prices are likely to remain at a high level, while transactions will depend more on timing and negotiation. The market is more likely to adjust through time rather than through a meaningful price correction.
For buyers, waiting for a clear price drop may not be the safest strategy. Under current cost conditions, the bigger uncertainty is not whether prices will go down — but whether they will move higher again.