(Yicai) July 24 -- After Iran blocked the Strait of Hormuz, impacting the global supply of sulfur, several listed Chinese makers of phosphate chemicals plunged today, after rising yesterday.

Yihua Chemical Industry [SHE: 000422] closed 5.1 percent down at CNY12.86 (USD1.89) today. Liuguo Chemical [SHA: 600470] fell 3.7 percent to CNY5.15 (76 US cents), and Chuan Jin Nuo Chemical [SHA: 300505] dropped 6.4 percent to CNY16.42. The stocks climbed more than 6 percent yesterday.

Iran yesterday announced it controls and "completely blocked" the Strait of Hormuz, Xinhua News Agency reported. During the ongoing "provocation" by the United States in the region, no oil tanker is allowed to enter or exit the Strait of Hormuz, which accounts for one-third of global sulfur transportation.

As a result, the reference price for granular sulfur at Zhenjiang Port was reportedly CNY9,170 (USD1,353) per ton yesterday, remaining at historically high levels.

Phosphate rock supply is also facing tightening at a strategic level. China's new mineral resources law, effective June 15, included phosphate rock, lithium, cobalt, rare earths, and 32 other minerals in the national list of strategic mineral resources.

The new law exerts comprehensive control over the entire chain of exploration, mining, production, storage, and sales of such mineral resources and transfers the approval of new exploration and mining rights to the provincial governments or Ministry of Natural Resources.

In February, US President Donald Trump signed an executive order, designating elemental phosphorus as a critical material related to national defense and security.

On the demand side, the application of phosphate resources is expanding from traditional agriculture and industry to new energy and semiconductors. According to estimates from Zhongtai Securities, lithium iron phosphate will drive phosphate rock demand by nearly 3.4 million tons this year, accounting for 12 percent of the total phosphate rock demand.

Moreover, high-purity red phosphorus, the raw material for indium phosphide, a key component in optical modules for artificial intelligence data centers, has long been monopolized by Japan's Nippon Chemical Industrial and Rosa Industries. From this month, they have tightened export quotas to China, posing temporary supply disruption risks.

The supply-demand gap for phosphate rock in China is expected to reach 320,000 tons this year, 1.3 million tons next year, and nearly 9.8 million tons in 2028, indicating that the supply and demand will become increasingly tight in the future, according to Kaiyuan Securities.

Global phosphate rock production rose 4.6 percent to about 250 million tons last year from the year before, according to data from the US Geological Survey. China, Morocco, the US, and Russia are the major producers. China's phosphate rock production was around 110 million tons last year. The import volume was 998,200 tons in the first half of this year, up 30 percent from a year earlier.

Editor: Futura Costaglione