Phosphorus chemical industry experiences surge in limit-up streaks! The US designates phosphorus and glyphosate as national security priorities

On February 24, the first trading day of the Year of the Horse, the A-share phosphate chemical sector continued to rise, with many stocks hitting the daily limit. By the close, Yuntianhua (600096), Liuguo Chemical (600470), Hubei Yihua (000422), Xingfa Group (600141), and Chuanheng Co., Ltd. (002895) all hit the limit during trading, while Chuanjinnuo (300505) rose over 13%. Jiangshan Shares (600389), Xin’an Shares (600596), and others led the gains.

In terms of news, on February 18, U.S. President Trump signed an executive order invoking the Defense Production Act, elevating phosphorus and glyphosate herbicides to a matter of national security priority, citing shortages of these materials as a direct threat to national security. Additionally, as early as November 2025, the U.S. Geological Survey (USGS) first included phosphates in the list of critical minerals.

From the phosphate chemical industry chain perspective, the balanced supply and demand in China’s domestic phosphate ore market support the high prosperity of the entire industry chain. China’s phosphate resources are characterized by scarcity of rich deposits and abundance of low-grade ores. After years of intensive mining, the grade of extractable ore continues to decline, with increasing difficulty and costs. Meanwhile, tightening environmental policies and stricter safety regulations have led to the exit of many small and medium-sized capacities. The long cycle for new capacity deployment results in weak growth in effective supply.

According to Longzhong Information data, as of January 2026, the spot price of 30% grade phosphate ore in China has been hovering around 1,000 yuan/ton for nearly three years.

Glyphosate is an important terminal product in the phosphate chemical industry chain. Its production starts from phosphate ore, which is processed into yellow phosphorus, then further synthesized into intermediates like phosphorus trichloride, ultimately producing glyphosate active ingredients. It is highly efficient, low toxicity, and broad-spectrum, making it the preferred herbicide for major crops such as corn, soybeans, cotton, and wheat, and an essential agricultural input.

China is the world’s largest producer of glyphosate active ingredients, supplying about 70% of global demand. According to China Pesticide Information Network, the glyphosate industry in China is highly concentrated, with the top four companies accounting for over 70% of capacity. Xingfa Group leads domestically with a capacity of 230,000 tons per year and ranks second globally.

Longzhong Information states that the overall glyphosate market currently exhibits a low-price, cautious attitude. With supply tightening and rising costs, mainstream producers generally hold onto stocks at low prices, with spot prices for 95% glyphosate active ingredient remaining between 23,000 and 24,000 yuan/ton.

Additionally, phosphate fertilizer, one of the three major single-element nutrient fertilizers, is the most important downstream product of phosphate ore. Jilianchuang indicates that supported by persistently high prices of sulfur and other raw materials, domestic phosphate fertilizer production costs are under significant pressure, and companies are strongly willing to maintain prices. As the spring planting season approaches, demand is gradually releasing, and the phosphate fertilizer market is expected to remain high. In the medium to long term, attention should be paid to changes in raw material costs and policy regulation effects.

Notably, benefiting from the explosive growth of new energy vehicles and energy storage markets, demand for phosphorus-containing new energy materials has increased significantly. Guoxin Securities estimates that, assuming global energy storage battery shipments reach 600 GWh, 800 GWh, and 983 GWh in 2025-2027, the demand for phosphate ore in China will account for 4.7%, 5.9%, and 7% of the predicted domestic production, respectively. Energy storage-grade lithium iron phosphate (LFP) requires extremely high raw material purity, and the actual available high-grade phosphate resources are much scarcer than the total amount, giving companies with high-quality mineral sources and integrated mining capabilities a significant advantage in the new energy materials competition.

(Source: The Paper)