2025 Year-End Global Potash Market and China Fertilizer Market Analysis

China’s Annual Contract Anchors Global Pricing While Supply–Demand Dynamics Shape the Market

In November 2025, China finalized its 2026 annual potash import contract—an event that quickly became the central anchor for global potash pricing. The agreement not only halted the price slide in several emerging markets but also ignited China’s winter fertilizer stocking season.

At the same time, rising sulfur and sulfuric acid prices pushed production costs sharply higher, placing China’s phosphate fertilizer sector under pressure. Together, these forces have created a market landscape defined by global pricing anchored to China, cost-driven fertilizer adjustments, and an intensifying supply–demand game.

As the world’s largest potash importer, China’s annual contract has long been viewed as the market’s most important benchmark. The finalization of the 2026 contract shifted the global market from hesitation to stabilization, while also magnifying regional differences and key market variables.

1. China’s Contract as a Global Anchor: Supporting Prices and Rebounding Emerging Markets

The China contract ensures stable offtake for global suppliers, relieving their pressure to cut prices and effectively establishing a floor for global MOP prices.

Emerging markets reacted immediately:

• Brazil:

  January-shipment MOP prices rebounded to USD 360–370/ton CFR, marking the largest increase in six months and fully reversing the decline since August.

  
  

• South Africa:

  Prices followed a similar trend, climbing toward the upper end of the assessment range.

  
  

Both regions have strong agricultural demand fundamentals and rely heavily on China’s contract for price guidance, so market confidence recovered rapidly.

By contrast, mature markets in Europe and North America experienced slight downward pressure due to winter seasonality and high inventories. However, most institutions view this as temporary weakness, expecting demand to rebound as preparations for the 2026 spring planting season begin. Thus, global markets display a structure of short-term divergence but long-term convergence.

(2) India: The Next Critical Variable for Global Price Stabilization

India, the world’s second-largest potash importer, is set to begin negotiations for its 2026 standard MOP contract. Historically, China and India contract prices exhibit strong correlation, making the upcoming talks a major market focus.

Key factors shaping the negotiation:

• India’s rapid agricultural modernization is expected to increase demand for high-quality potash.

  
  

• Suppliers may gain pricing power

  
  

• The Indian government could mitigate costs via quota or subsidy adjustments—creating uncertainty in the final outcome.

  
  

If India reaches an agreement in line with expectations, the global potash market will form a dual-support system: “China anchors, India reinforces.”

3. Regional Case Study: Indonesia’s Tender Highlights Price Sensitivity

A recent tender process in Indonesia offers a snapshot of price-sensitive markets:

• One importer purchased 8,000 tons of granular MOP at USD 384/ton CFR. However, they rejected a 50,000-ton offer of standard MOP priced at USD 395–400/ton CFR, instead choosing 40,000 tons of powder MOP at USD 376.50/ton CFR.

  
  

This reflects two common behaviors in Southeast Asia and Africa:

1. Strong resistance to higher prices;

   
   

2. Buyers switch between granular and powder grades—or shift their purchasing timeline—to control costs.

   
   

These markets require suppliers to adopt flexible pricing and product-mix strategies to balance volume and margin.

1. China’s Potash Market: Winter Storage Reverses Sentiment and Tight Balance Persists

Following the signing of the China contract, market sentiment initially weakened, causing brief price dips. However, once Northeast China began early winter procurement and additional state-reserve purchasing emerged, supply–demand dynamics shifted sharply.

(1) Regional Dynamics: Northeast Demand Spreads Nationwide

The 2025 spring-planting procurement season in Northeast China started earlier than usual. Combined with high phosphate prices and tight availability, compound fertilizer producers accelerated potash purchasing.

Market observations:

• Traders in North and East China reported a significant increase in inquiries from Northeast buyers.

  
  

• Local spot shortages triggered demand spillover, rapidly lifting prices across northern provinces.

  
  

• At ports, inventories are recovering slowly, and major importers are releasing cargo cautiously. Some factories must queue to pick up contracted volumes.

  
  

• Border-trade supplies remain tight: Russian railcars delayed deliveries, pushing prices for large-granular red MOP even higher.

  
  

(2) Product Differentiation: Tight Balance in MOP, Cost Pressure in SOP

• Domestic MOP:

  
  

  Small and medium producers entered winter maintenance, while large producers maintained stable operation. Official list prices held steady, but actual transactions vary widely and are often negotiated

  case-by-case.

  
  

• Sulfate of Potash (SOP):

  
  

  • Mannheim-process plants faced dual cost pressure from high MOP and high sulfuric acid; many continued selling below cost with low operating rates.

    
    

  • Although they have minimal inventories due to earlier orders, new sales slowed as high prices met resistance.

    
    

  • Resource-type SOP producers had adequate supply and stable list prices; trader prices were significantly lower than Mannheim SOP, widening regional price spreads. Some areas showed early signs of upward adjustment.

    
    

Raw Material Market: Strengthened Cost Transmission & Divergent Price Movements

From late November to early December, raw material markets displayed clear structural differences:

• Phosphate rock: South remains firm; North shows mild recovery.

  
  

• Sulfur: Tight supply and high import costs fuel strong price momentum.

  
  

• Sulfuric acid: Prices rose sharply due to higher feedstock costs and supply reductions.

  
  

• Synthetic ammonia: Regionally mixed, constrained by logistics.

  
  

(1) Raw Material Price Snapshot

• Phosphate Rock

Southwestern regions (Guizhou, Sichuan) show firm pricing and low outbound supply as miners withhold sales; Hubei output is restricted by permit limits.Northern markets are rebounding from their lows due to eased environmental inspections and rising downstream demand.High yellow phosphorus prices provide additional support.

• Sulfur

Port inventory: 2.23 million tons, slightly lower week-on-week.Market fluctuates at high levels:

• Factory restocking supported sentiment

  
  

• Recent transactions weakened again

  
  

• Sellers reluctant to sell; buyers struggle to secure offers

  
  

  International tightness keeps external replenishment costs high.

  
  

  With limited arrivals in China and gradually increasing domestic demand, the market remains “easy to rise, hard to fall.”

  
  

• Sulfuric Acid

Prices continue climbing, up 30–150 yuan/ton driven by high sulfur and pyrite costs.

• South China: supply drop from pyrite price hikes + plant maintenance

  
  

• Yunnan: maintenance + steady downstream demand

  
  

• Shandong: reduced external resources tighten supply

  
  

• Synthetic Ammonia

Fluctuating at high levels.Main pattern: sideways movement; high-price regions face resistance, low-price regions have room to increase.Transportation radius constraints cause regional discrepancies.

(2) Core Insights on Raw Materials

1. Sulfur: Tight supply–demand balance remains; global sulfur prices continue upward → market remains firm

   
   

2. Phosphate Rock: Strong in the south, rebounding in the north → overall bullish

   
   

3. Synthetic Ammonia: Mixed movement → regional differentiation continues

   
   

Phosphate Fertilizers: Cost Pressure Lifts Offers While Demand Recovery Remains Slow

Driven by higher sulfur-related costs, most phosphate fertilizer producers paused formal quotations. The market showed signs of “short-term rational slowdown followed by localized improvement.”

• Industrial demand for low-grade MAP and DAP stabilized after a period of cooling.

  
  

• Downstream buyers remain cautious but are gradually improving their ability to accept offers.

  
  

• High costs continue to clash with weak demand; shipment volumes are primarily limited to small just-in-time orders.

Short-Term Outlook

Exports Surge Strongly, Imports Slightly Decline and Stabilize

Customs data for January–November 2025 highlight China’s growing influence in global fertilizer trade.

Exports

• Total exports of major fertilizers: 42.86 million tons, +46.4% YoY

  
  

• Export value: USD 12.937 billion, +61.5% YoY

  
  

November alone:

• Volume: 4.041 million tons, +31.7% YoY

  
  

• Value: USD 1.387 billion, +40.2% YoY

  
  

Imports

• Total imports: 12.432 million tons, –1.4% YoY

  
  

• Total value: USD 4.247 billion, +2.9% YoY

  
  

November alone:

• Volume: 1.389 million tons

  
  

• Value: USD 522 million

  
  

• Average import price: USD 376.10/ton

China’s potash market will maintain a tight supply–demand balance:

• Strong Northeast winter storage demand

  
  

• Limited port-available volume

  
  

→ Together support a volatile but upward price trend.

However, downstream resistance to high prices warrants attention.

Globally, the key focus will be the India contract negotiation. A favorable settlement would strengthen the worldwide stabilization trend established by China’s contract.

Medium- to Long-Term Outlook for 2026

Global potash is expected to remain “tight but resilient”:

Demand side

• Growth driven by food-security strategies

  
  

• Strong consumption in emerging markets

  
  

Supply side

• Limited capacity expansion in Canada, Russia, and other major producers

  
  

• Environmental policies restricting high-cost production

  
  

Cost side

• High sulfur and sulfuric acid prices will continue supporting fertilizer cost structures

  
  

• Phosphate fertilizer demand will rely on the 2026 spring peak season for recovery

  
  

Key Variables to Monitor

1. Progress of India’s MOP contract negotiations

   
   

2. Pace of China’s winter potash procurement

   
   

3. Restoration of global potash supply flows

   
   

4. International sulfur price movements

Attention: The above information is for commercial reference only due to the diversity of information collected, and Kelewell is not responsible for the authenticity of the data.