In June 2025, phosphorus acid markets in China experienced strong bullish sentiment due to robust demand from the agrochemical sector, particularly for glyphosate production. A sharp rise in glyphosate output, up over 10% month-on-month, aligned with peak export demand to South America, driving higher consumption of phosphorus acid. Simultaneously, supply remained constrained due to upstream volatility, elevated feedstock costs, and severe congestion at the Port of Shanghai, disrupting both inbound and outbound logistics.
The Phosphorus acid prices saw sharp hikes in June 2025 and were raised by 3.9% FOB Shanghai. The hike in the prices was majorly driven by increase in the demand from the downstream agrochemical industry and major supply side disturbances. Increase in demand boosted the sentiments upwards while supply disturbances further drove the bullish sentiment upwards.
Supply side dynamics for phosphorus acid were relatively tight due to upstream uncertainty and logistical complications. Prices at the start of the month for prime feedstock phosphorus trichloride accelerated sharply, as a result of constricted supply and elevated raw yellow phosphorus prices. Though the feedstock market stabilized in June's second half, the initial surge gave a lift in the cost of producing phosphorus acid, leading some smaller producers to reduce output or delay buying. Further, ongoing Port of Shanghai congestion severed inbound raw material supply chains and outbound phosphorus acid shipments, further clouding supply chains. These supply chain backlogs discouraged factory exports and delayed contract fulfilment, especially for export-oriented producers. As a result, although downstream demand was steady from glyphosate producers, supply of phosphorus acid remained tight during the month, and market participants observed longer lead times and more reliance on inland inventories in fulfilling orders.
In June 2025, Chinese demand for phosphorus acid saw significant strength, led mainly by a dramatic rise in glyphosate production.
Glyphosate, one of the most used herbicides, relies intensively on phosphorus acid as an important intermediate in glyphosate production. Glyphosate production accelerated to around 53,700 tonnes in the month, a 42% year-on-year rise and a 10.1% advance from May 2025. The glyphosate plant operating rate accelerated to around 80%, both month-on-month and year-on-year. This increase in production was closely related to the beginning of peak export season to South America, a key market for Chinese glyphosate leading to higher production runs and raw material usage. In addition, local glyphosate inventories decreased by more than 54% from mid-February through end-June, signifying solid downstream offtake.
With strong export demand, increased plant utilization, and ongoing destocking patterns, phosphorus acid use increased sharply in June, as firms increased procurement to maintain supply continuity and achieve delivery commitments. Following the ChemAnalyst database, prices of Phosphorus acid is going to further push up in July and August fuelled by strong downstream demand from agrochemical industry. Since peak export demand for agrochemicals from South America is imminent, production is anticipated to grow resulting in raw material procurement such as phosphorus acid. Hence, near-term scenario is likely to be bullish.
