Nature of the Policy: An upgrade in quality-standard-based regulation—not an export quota, nor an export ban. Compliant, high-quality products will continue to be exported smoothly, while low-quality, low-priced goods will be rapidly cleared from the market.

Short-term Impact (0–6 months): Slower customs clearance, industry consolidation, a return of low-end products to the domestic market (exerting downward pressure on spot prices), and a temporary rise in disputes over the fulfillment of foreign trade contracts.

Medium-to-Long-term Impact (6–24 months): An end to the "race to the bottom" (cutthroat price competition) within the industry, restored bargaining power, a shift toward long-term direct supply agreements as the market norm, and a significant strengthening of China’s influence over international pricing for ammonium sulfate.

PART 01: Supply Landscape of the Ammonium Sulfate Industry and the Background of the New Policy

China holds a solid, core position in the global production and trade of ammonium sulfate. As the world’s largest producer and exporter, my country derives its supply primarily from industrial by-products—specifically from coking, caprolactam, and acrylonitrile production. Chinese products account for over 95% of global cross-border trade in ammonium sulfate, making China an irreplaceable pillar of the global supply chain. Global production capacity for ammonium sulfate has grown from 26.68 million tonnes/year in 2021 to 43.62 million tonnes/year in 2025—a compound annual growth rate of 13.1%. China’s share of this global capacity has risen from 53% to 63%, contributing approximately 80% of the total global capacity expansion.

The vast majority of China’s ammonium sulfate production is destined for export. Export volumes reached 17.12 million tonnes in 2024 (a 24.3% year-on-year increase) and are projected to climb further to 21.36 million tonnes in 2025 (a 24.8% year-on-year increase). With an export dependency ratio (export volume divided by total production) as high as 86.6%, nearly 90% of China’s output relies on overseas markets for absorption. Furthermore, the export structure is highly concentrated. Brazil is the largest market, accounting for 36.4% of exports in 2025—a steady increase from 28.7% in 2019—with the product primarily used for soybean and sugarcane cultivation. Other major destinations include Turkey, Myanmar, Indonesia, and Vietnam, where the product is used for palm oil and rice cultivation in Southeast Asia, as well as for the processing of raw materials for compound fertilizers in West Asia. Together, these top five countries account for 56.4% of the total.

The previous regulatory model contained three significant loopholes. Following the removal of ammonium sulfate from the statutory inspection catalog in 2018, exports became exempt from mandatory inspection, requiring only internal quality checks by the enterprises themselves. This prolonged period of lax oversight led to several issues: First, a surge of small- and medium-sized traders—lacking both compliant supply sources and quality control systems—began dumping low-quality, by-product ammonium sulfate (derived from coking processes) at rock-bottom prices, creating a market environment where "bad money drives out good." Second, the lack of mandatory inspection created opportunities for classification arbitrage; some entities exploited this loophole by misdeclaring the product name to illegally export restricted nitrogen fertilizers, such as urea. Third, the outflow of substandard, non-compliant products damaged the international reputation of Chinese-made ammonium sulfate. This resulted in a market characterized by high volume but low value, leaving the industry without a voice in international pricing and continuously compressing profit margins in foreign trade.

PART 02: Adjustments to Ammonium Sulfate Export Policy and Customs Clearance Procedures

The core objective of these adjustments is to raise the quality threshold for exports and standardize industry order. There are no export quotas or bans; compliant products may continue to be exported as usual. Effective July 16, all exports of ammonium sulfate and its double-salt mixtures must undergo statutory customs inspection. This process includes on-site verification by customs authorities and laboratory testing of samples, with a focus on key indicators such as nitrogen content, free acid, moisture, chloride ions, heavy metals, and color. Only after passing these checks will the necessary customs clearance documentation be issued, allowing for the formal declaration and release of the goods.

The changes to the customs clearance process entail three specific cost adjustments. The previous, highly streamlined workflow—consisting simply of "stock preparation, customs declaration, and release"—has been replaced by a more rigorous sequence: stock preparation, inspection application, on-site verification/laboratory sampling and testing, acquisition of customs clearance documentation, formal customs declaration, and final release. The standard on-site inspection process takes 3–5 business days, with additional time required for batches that must undergo laboratory testing. This results in: ① increased comprehensive costs for enterprises, including new testing fees, operational labor, port demurrage, and capital tied up in inventory; ② the need for a "buffer period" to accommodate inspections, raising the risk of short-term shipping delays and potential contract defaults; and ③ a temporary decline in customs clearance efficiency, which may lead to short-term congestion at ports.

PART.03 Impact on my country’s Ammonium Sulfate Exports

This mandatory inspection policy marks a pivotal shift in the foreign trade of this specific fertilizer category—moving from a focus on "scale expansion" to "quality enhancement." While it may cause short-term disruptions, the long-term positive trajectory remains unchanged; structural optimization will, in fact, drive industrial upgrading.

Short-term Impact (0–6 Months): Slower Export Pace, Industry Consolidation, and Structural Divergence

First, the growth rate of exports will experience a temporary pullback, with a clear stratification between high-quality and low-quality products. Inspection queues and delays in customs clearance will slow down the pace of shipments. Goods from small- and medium-sized traders that fail to meet specific quality standards will be blocked, hindering monthly export growth. The market will become increasingly polarized: high-quality ammonium sulfate—a by-product from leading caprolactam producers—boasts stable specifications and high pass rates, leaving its exports largely unaffected. Conversely, a significant volume of low-end, powdered ammonium sulfate (a by-product of coking) will be forced out of the export market.

Second, the exit of market players will accelerate, leading to higher industry concentration. Small- and medium-sized traders—lacking their own production facilities or quality-testing capabilities—will be unable to absorb the costs associated with inspection lead times, port demurrage, and regulatory compliance. Consequently, they will rapidly exit the sector, with market share increasingly shifting toward major producers that possess their own production capacity and standardized quality control systems.

Third, domestic spot prices will face downward pressure, and the price gap based on quality will widen. Products previously intended for export may flow back into the domestic market, exerting slight downward pressure on domestic spot prices for ammonium sulfate. Meanwhile, the price differential between high-quality and low-quality goods will continue to expand, with the premium for high-quality products becoming increasingly apparent. Fourth, the risk of failing to fulfill export contracts will rise, necessitating a restructuring of cooperation models. For goods currently in transit or awaiting loading, no buffer period was generally factored in for inspections, leading to an increase in disputes over port demurrage charges and breaches of shipping schedules. Enterprises and their overseas buyers are now forced to renegotiate terms—such as delivery timelines, cost-sharing arrangements, and liability exemptions—resulting in a more cautious approach toward signing new short-term orders.

Medium-to-Long-Term Impact (6–24 Months): Upgrading of Export Structure, Enhanced Quality and Efficiency, and Greater Market Leverage

First, a recovery in total export volume, accompanied by a permanent optimization of the product mix. Following the short-term elimination of inferior-quality goods, the export market is now dominated by compliant, high-quality products. While total export volume is gradually realigning with the fundamentals of actual overseas demand—maintaining overall stability—the quality of exported products has undergone a systemic upgrade.

Second, an end to "cutthroat" low-price competition within the industry, alongside a significant improvement in bargaining power. As low-end, low-priced, or "dumped" products are completely phased out of the international market, overseas buyers are compelled to source from compliant, high-quality suppliers. This marks the end of destructive, price-based competition for domestic ammonium sulfate; a "quality premium" for caprolactam-grade granular ammonium sulfate has become the new market norm, allowing for a sustained recovery in export profit margins.

Third, an evolution in trade models, with long-term, direct-supply agreements becoming the mainstream. A mature trade landscape—characterized by direct supply from the original manufacturing plants and governed by long-term agreements—is taking shape. Major overseas buyers are prioritizing long-term contracts with leading producers, while the role of small-to-medium-sized intermediaries in the supply chain continues to diminish.

Fourth, the closure of regulatory loopholes and the normalization of industry compliance. Through the implementation of mandatory two-way legal inspections, "gray-market" practices—such as the misdeclaration of product names or illicit arbitrage—are being effectively eradicated, ensuring a fully standardized regulatory environment for fertilizer exports.

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From:ChemNet