Price Surge Leads to Export Quote Suspension
In recent weeks, industrial grade monoammonium phosphate (MAP) prices in China have experienced a sharp surge. The FOB prices at Chinese ports have escalated from around $780 to between $840 and $860 within a two-week period, marking an 8% increase compared to the beginning of the month. Despite this, most factories continue to grapple with supply shortages, with some even halting export quotations and redirecting significant production capacity to meet domestic demand.
Low Inventory and Surging Demand
The persistent depletion of industrial MAP inventory and a simultaneous increase in demand have propelled the surge in product prices. Since late February, industrial MAP inventory in China has been steadily decreasing, largely due to export restrictions lasting for four months. As of May 10th, inventory levels have dwindled to just 3,300 tons, marking an approximate 87.7% decrease since the beginning of the year and reaching historically low levels. With the arrival of the peak season for water-soluble fertilizers, the supply of industrial MAP remains tight, further driving up prices. Despite sustained high prices for upstream raw materials such as phosphate ore, the improved gross margins for industrial MAP are anticipated with the price hike. Water-soluble fertilizers, known for their efficiency, water conservation, and environmental benefits, have witnessed growing demand in various sectors such as economic crops, horticulture, and landscaping. With China's push for water and fertilizer conservation policies in recent years, the integration of water and fertilizer has rapidly progressed, leading to a continuous increase in demand for water-soluble fertilizers. Data indicates that from 2016 to 2021, the market size of water-soluble fertilizers in China grew from 42.5 billion to 69.75 billion, with a compound annual growth rate of approximately 10.4%. As a key raw material in water-soluble fertilizers, industrial MAP accounts for a significant proportion of approximately 55%. With the rapid development of water and fertilizer integration in water-scarce regions such as Xinjiang, it is expected that June will usher in a peak demand period for water-soluble fertilizers, thereby stimulating the growth in demand for industrial MAP.
Surging Demand in the New Energy Sector
The growth in demand for lithium iron phosphate (LFP) batteries has also driven the increase in industrial MAP usage. With the rise in demand for new energy vehicles and energy storage, the production of LFP batteries has surged. In 2023, China's production of LFP batteries increased by 77.3% year-on-year, reaching 1.44 million tons. By April 2024, production of LFP batteries increased by 92.5% year-on-year and 58.6% month-on-month. Against this backdrop, prices of LFP products have gradually rebounded, reaching 10,400 yuan per ton on May 15th, an increase of approximately 1.0% from the January low. As an important raw material for the production of LFP by the ammonia method, industrial MAP accounts for about 15% of the demand, exerting a positive impact on the industrial MAP market.
Monoammonium phosphate (MAP) is often utilized as a precursor material in the fabrication of rechargeable batteries, particularly in the context of the development of phosphate-based electrode materials. Here's how it can be used:
Synthesis of Cathode Materials: Monoammonium phosphate can be employed as a precursor for synthesizing cathode materials, especially in phosphate-based cathode materials such as lithium iron phosphate (LiFePO4) or sodium iron phosphate (NaFePO4) batteries. In the synthesis process, monoammonium phosphate is typically reacted with metal precursors such as iron or lithium salts to form the desired phosphate-based cathode material.
Phosphorus Source: Monoammonium phosphate serves as a source of phosphorus in the synthesis of phosphate-based battery materials. Phosphorus is an essential component in these materials, contributing to their electrochemical properties and stability during charge-discharge cycles.
Controlled Precursor for Particle Morphology: The use of monoammonium phosphate as a precursor can also allow for control over the morphology and particle size of the resulting cathode material. Controlling these characteristics is crucial for optimizing the electrochemical performance of the battery, including factors such as capacity, cycling stability, and rate capability.
Thermal Decomposition: Monoammonium phosphate undergoes thermal decomposition at elevated temperatures, leading to the formation of metal phosphates, which can serve as active materials in battery electrodes. This decomposition process can be controlled to tailor the properties of the resulting electrode material, such as crystallinity and phase composition.
Compatibility with Aqueous Processing: Monoammonium phosphate is soluble in water, making it compatible with aqueous processing techniques for synthesizing battery materials. Aqueous processing offers advantages such as environmental friendliness, cost-effectiveness, and ease of scalability compared to traditional organic solvent-based methods.
Overall, the use of monoammonium phosphate as a precursor material offers a promising avenue for the development of phosphate-based electrode materials for rechargeable batteries, with potential applications in both lithium-ion and sodium-ion battery systems.
Conclusion
Based on the current order quantities required by factories, it is expected that factories will need to maintain full production capacity until the end of June. Therefore, it is difficult to anticipate a decline in prices during this period. With the sustained increase in demand, industrial MAP prices may continue to rise.
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