China Fertilizer Market Analysis:Phosphate Fertilizers Driven by Price Stability and Supply Assurance, Tight Potash Balance Continues

From December 26, 2025 to January 9, 2026, China’s domestic fertilizer market operated around the core theme of “price stability and supply assurance for phosphate fertilizers.”

On the raw material side, clear divergence was observed: phosphate rock remained largely stable, sulfur fluctuated at high levels, while sulfuric acid and synthetic ammonia stayed broadly stable.

The potash market continued to operate under a tight supply–demand balance, with prices holding firm at elevated levels. On the supply side, domestic maintenance schedules and slow import arrivals overlapped; on the demand side, compound fertilizer operating rates recovered, but procurement remained cautious. Overall, market competition and strategic positioning intensified.

I. Raw Material Market: Divergent Performance, Sulfur at High Levels as the Key Highlight

The raw material market was characterized by “high-level sulfur volatility, while other products remained generally stable with minor adjustments.” Supply-side constraints combined with seasonally strengthening demand dominated the market, while policy regulation remained a potential influencing factor.

(1) Market Dynamics of Key Raw Materials

• Phosphate Rock:

  
  

  The market in major producing regions remained generally stable, with no price changes. Mines primarily focused on fulfilling outstanding orders.

  
  

  Regional performance was differentiated: most mines in Hubei suspended operations, with new contract signings temporarily paused; Guizhou continued to see relatively low outbound volumes; Sichuan mainly shipped existing orders; and northern regions experienced tight production.

  
  

  Downstream phosphate fertilizer producers maintained stable operating rates, focusing on winter stockpiling and spring plowing fertilizer production, providing steady demand support for phosphate rock.

  
  

• Sulfur:

  
  

  China’s sulfur market fluctuated at high levels, driven primarily by tight import supply. Chinese buyers adopted a cautious replenishment strategy, while existing inventories continued to decline. Current domestic port sulfur inventories stood at 1.95 million tonnes.

  
  

  On the supply side, tight availability of imported sulfur is expected to persist in January, with China’s import prices following the upward trend in the global market and import costs increasing accordingly.

  
  

  On the demand side, downstream demand strengthened seasonally, supporting a relatively bullish market sentiment.

  
  

  From a longer-term perspective, tight sulfur supply in the international market is unlikely to ease significantly. China’s ability to absorb high-priced imports remains limited, with relatively low arrivals expected in the first quarter. In the short term, sulfur prices are still expected to remain firm and fluctuate at high levels, though close attention should be paid to potential policy intensification.

  
  

• Sulfuric Acid:

  
  

  Domestic prices remained mostly stable. In the short term, the market is expected to continue operating steadily. Due to differences in regional supply capacity and transportation conditions, regional supply–demand balances vary, and subsequent adjustments will likely be differentiated by region.

  
  

• Synthetic Ammonia:

  
  

  The market fluctuated within a narrow range, with the price center remaining relatively stable. Stable operating rates at downstream phosphate fertilizer plants provided certain demand support. In the short term, the market is expected to focus on stable-priced shipments, with narrow adjustments possible in some regions. Regional price differences will continue due to transportation radius constraints.

II. Phosphate and Compound Fertilizers: Continued Implementation of Price Stability and Supply Assurance, Persistent Cost Pressure

This week, meetings on price stability and supply assurance for phosphate fertilizers continued, with a clear policy direction. Cost-side pressure remains significant: international sulfur prices continue to rise, while global supply capacity is unlikely to recover in the short term. Insufficient domestic arrivals make price declines difficult.In the sulfuric acid segment, smelting-acid producers are facing notable losses due to processing fee issues, limiting room for price reductions.

At present, raw material sulfur can only be allocated for targeted supply assurance, and firm sulfur prices continue to underpin phosphate fertilizer production costs.

On the supply side, phosphate fertilizer producers maintained stable operating rates, focusing on production for winter stockpiling and spring plowing, and fully implementing price stability and supply assurance requirements.

III. Potash Market: Tight Supply–Demand Balance Continues, Firm High-Level Prices Unchanged

China’s domestic potash market continued to operate at high levels with limited volatility. Potassium chloride prices remained firm, while the potassium sulfate market showed clear differentiation. Overall circulating supply remained tight, and supply–demand competition intensified.

International market activity was subdued due to the holiday season, while East Asia remained relatively active, with particular attention on Indonesia’s potassium chloride tenders.

(1) Supply Side: Dual Pressure from Domestic Maintenance and Slow Imports Tightens Availability

1. Domestic Potash:

   
   

   A pattern of “large producers maintaining output, small producers under maintenance” persisted. Major producers in Qinghai continued operating, but output declined compared with earlier periods due to lower raw material quality and winter production constraints. Some producers plan to initiate maintenance by the end of January, further compressing supply flexibility.

   
   

   Small Qinghai producers of 57% powder potassium chloride remained largely shut down to allow for resource restoration, keeping marketable volumes tight. Official domestic potash prices remained stable, though actual transaction prices varied by region due to local supply–demand differences.

   
   

2. Imported Potash:

   
   

   Port inventories remained at historically low levels. As of January 8, total port inventories stood at 2.4749 million tonnes, up only 1.89% month-on-month.

   
   

   Although the 2026 annual potash import contract was signed ahead of schedule and the market expects new cargo arrivals before the Lunar New Year, actual January arrivals have been slow due to extended shipping cycles and customs clearance efficiency. In addition, arrival distribution is uneven, with southern ports seeing relatively more replenishment and northern ports receiving limited volumes, exacerbating regional tightness.

   
   

   Large trading houses control contract resources, while small and medium traders have very limited sellable volumes, supporting prices at high levels. However, limited releases by major traders eased some inquiry pressure, prompting some buyers to shift toward lower-priced domestic potash and discounted cargoes.

   
   

3. China–Europe Railway:

   
   

   Arriving cargoes of 62% white potassium chloride and granular potash provided limited supplemental supply, but prices remained high and were generally benchmarked against seaborne import prices. As a result, their impact on the mainstream market was limited, contributing mainly to structural adjustments rather than overall price pressure.

   
   

(2) Demand Side: Recovery in Compound Fertilizer Operations, but Cautious Procurement Limits Demand

1. Potassium Chloride Demand:

   
   

   As the pre-holiday fertilizer stocking window approaches, operating rates at downstream compound fertilizer plants have gradually recovered, with previously shut units resuming production. However, buyers remain cautious toward high-priced potassium chloride, focusing on “just-in-time replenishment” rather than large-scale stockpiling. The weak recovery in demand has not formed strong support.

   
   

2. Potassium Sulfate Demand:

   
   

   The market showed a differentiated pattern of “losses for Mannheim producers, stability for resource-based producers.”

   
   

   Mannheim potassium sulfate producers maintained low operating rates. High potassium chloride and sulfur prices severely compressed margins, resulting in persistent price inversion. Downstream purchasing interest remained weak, new transactions were limited, and some producers experienced slight inventory accumulation. A few producers attempted to stimulate buying through order restrictions or quotation-based sales.

   
   

   Resource-based potassium sulfate plants maintained stable operating rates and official prices, but circulating volumes remained limited. Trader quotations varied widely, and overall demand remained weak.

   
   

(3) Short-Term Outlook: Firm High-Level Prices to Continue, Limited Volatility

In the short term, China’s potash market is expected to remain firm at elevated levels, with limited room for significant fluctuation, based on the following logic:

1. Supply: Tightness will persist. Operating rates at major domestic producers are likely to decline further, with maintenance expanding among smaller producers. Although import arrivals may gradually accelerate, port inventory replenishment will take time. Border trade pre-sale orders have already locked in January volumes. High-cost China–Europe railway cargoes will have limited impact, and most resources remain concentrated in the hands of major traders, making a significant short-term supply increase unlikely.

   
   

2. Demand: Support remains limited. Although compound fertilizer operating rates continue to recover, high raw material prices suppress procurement enthusiasm. Potassium sulfate remains constrained by both cost pressure and weak demand, making a turnaround difficult.

   
   

3. Price Trend: Consolidation at high levels is expected. Under the tug-of-war between tight supply and weak demand recovery, prices are unlikely to break out in the short term. While policy remains a potential variable, current demand is relatively limited and sellers retain pricing power. Close attention should be paid to changes in arrival rhythms before and after the Lunar New Year, as well as the potential impact of policy intervention on market expectations.

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.