Current MAP Market Overview: Rising Supply and Sluggish Off-Season Demand
As July begins, the domestic supply of monoammonium phosphate (MAP) continues to rise, with the industry's capacity utilization rate climbing above 58% and inventory levels increasing. However, the market is currently in the traditional off-season for consumption; end-user agricultural demand is sluggish, and downstream compound fertilizer manufacturers show little willingness to purchase. Compounded by the fact that exports have not yet opened up, the demand side lacks the capacity to absorb the increased supply, placing the market under downward pressure.
Continuous Recovery in Domestic MAP Production and Supply Growth
Since mid-June, the operating rates of domestic monoammonium phosphate (MAP) plants have steadily rebounded. By the first week of July, the industry's weekly capacity utilization rate reached 58.22%, up 5.14 percentage points week-on-week and a significant 10.06 percentage points higher than in mid-June. The increase in supply stems primarily from two factors: first, "supply-guarantee" enterprises have received shipments of sulfur at stable prices, easing production cost pressures and prompting them to ramp up operating rates to meet their mandates; second, several plants that had previously undergone maintenance have resumed normal production, leading to a marked increase in overall market supply. Production data shows a current weekly MAP output of 232,200 tonnes—an increase of 20,500 tonnes week-on-week and 40,100 tonnes compared to mid-June—indicating a continued rise in supply volume.
Downstream Compound Fertilizer Demand Remains Weak with Obvious Regional Divergence
Conversely, downstream demand remains generally weak, with low willingness to purchase at the terminal level; compound fertilizer manufacturers lack production incentives, keeping industry operating rates low. As of the first week of July, the weekly capacity utilization rate for the compound fertilizer industry stood at just 31.76%, a slight week-on-week decline of 0.46 percentage points. Regional operating rates show significant divergence: leading enterprises in Hubei, Shandong, and Henan have begun early preparations for the autumn wheat season, resulting in slight increases in plant operating rates. In contrast, manufacturers in Hebei show little inclination to produce; most previously idled plants remain shut down, with only a few production lines running at low capacity. In the Jiangsu and Anhui markets, seasonal demand for fertilizer has waned, leading small and medium-sized compound fertilizer plants to generally reduce operating rates or halt production, thereby contracting output. Enterprises in the Southwest continue to align production with sales, controlling operating rates based on demand, while the Northeast has entered the traditional off-season for fertilizer use, leaving most plants idle.
Strict Export Controls Restrict Overseas Market Release
Exports of MAP remain under strict control with no signs of liberalization, effectively stalling overseas sales channels. In previous years, the post-Q2 export window allowed overseas orders to absorb excess domestic supply; however, this year, the prices of raw materials—sulfur and sulfuric acid—have remained persistently high, and there have been no policy announcements regarding the easing of export restrictions, making a significant contraction in total annual export volume highly likely. Data shows that the total export volume of agricultural-grade monoammonium phosphate (MAP) from January to May was only 105,100 tonnes, an increase of 33,300 tonnes year-on-year. However, this increase is primarily attributed to the low baseline from the same period last year—when export restrictions were not lifted until May—and does not necessarily indicate a positive trend in exports for the current year.
Current Market Status: High Cost Support but Weak Trading Sentiment
Overall, MAP supply continues to rise, while demand remains sluggish and trading activity is sparse. Although prices remain firm due to high costs for raw materials like sulfur and sulfuric acid, downstream purchasing has been insufficient; the market is characterized by quoted prices without actual transactions, placing downward pressure on spot prices. In the short term, the market is likely to remain in a weak, stagnant state as large-scale fertilizer stockpiling for autumn planting has yet to begin and export constraints persist; conditions may improve in mid-to-late July.
Structural Market Contradictions: Rising Inventory vs. Rigid Cost Support
At present, the MAP market is trapped in a clear structural contradiction: continuous supply expansion versus stagnant off-season demand. With most manufacturers maintaining stable production schedules and limited active destocking initiatives, social inventory continues to accumulate month by month, gradually weighing on spot market sentiment. High raw material costs have formed a strong price floor, preventing substantial price declines, yet poor real trading restricts any upward correction, leaving MAP prices in a narrow weak consolidation range.
Seasonal Off-Season Characteristics Restrict Market Activity
From a seasonal perspective, July is the transitional period between summer off-season consumption and autumn fertilizer preparation. Downstream compound fertilizer factories are still dominated by destocking and low-load operation, and terminal farmers have no centralized fertilization demand, resulting in ineffective market circulation. Market participants remain highly cautious, with dealers mostly adopting a “small order and quick turnover” strategy and refusing to build up high inventory, further suppressing market activity.
Mid-to-Late July Market Turning Point and Demand Recovery Logic
Looking ahead to the second half of July and August, the market turnaround logic is relatively clear. As temperatures gradually stabilize and autumn sowing preparation approaches, domestic compound fertilizer enterprises will start centralized pre-production and raw material replenishment. The gradual recovery of domestic terminal demand will effectively digest excess MAP inventory and ease the current supply surplus situation. In addition, market attention continues to focus on national export policy adjustments; any marginal relaxation of MAP export supervision will release overseas order demand, greatly improving the current oversupply pattern.
Raw Material Cost Trend and Price Bottom Support
In terms of cost trends, sulfur and sulfuric acid prices are expected to fluctuate steadily in the short term, continuing to provide solid cost support for phosphate fertilizer products. The possibility of a sharp collapse in MAP prices is extremely low. Once demand improves significantly, the current rigid cost support will drive a moderate rebound in market quotations.
Full Market Summary and Q3 Recovery Outlook
To summarize, the short-term monoammonium phosphate market will continue to face pressure from rising supply and weak off-season demand, maintaining a weak consolidating trend. The key market turning point will arrive in mid-to-late July, with the gradual launch of autumn fertilizer stockpiling. With the dual boost of recovering domestic demand and potential export improvements, the MAP market is expected to end its sluggish performance and usher in a phased recovery in the third quarter.
