How is the shift from thermal to wet-process phosphoric acid reshaping China's supply structure?

China's phosphoric acid production has historically leaned on thermal processing via yellow phosphorus, but that route is constrained by high energy consumption and tightening environmental policy. Wet-process acid, which uses sulfuric acid to digest phosphate rock, is gaining share, especially as domestic producers adopt purification technologies for industrial and food grades. The cost calculus is shifting: sulfur prices hit record highs above 4,100 yuan per ton in late 2025, squeezing wet-process margins, while thermal acid's high purity gives it an edge in electronic and battery applications. The gap between wet and thermal acid prices has narrowed, making substitution more competitive. Companies with flexible wet-process purification lines, like those in Yunnan with access to abundant rock and hydropower, can swing production between fertilizer, feed-grade phosphate, and purified acid to optimize margins across market conditions.