China Fertilizer Market Brief: Costs vs. Demand (Sep 5–11, 2025)

In recent days, China’s fertilizer market has shown a clear pattern of “raw material divergence with cost support, and uneven fertilizer price performance.”

• Phosphate rock: Regional supply–demand mismatch between the North and South;

• Sulfur: Port inventories are rising, but strong price-holding sentiment persists, providing firm cost support to phosphate fertilizers;

• Urea: Facing the most severe supply–demand crisis in a decade, prices have fallen below cost lines, with nearly 30% of enterprises operating at a loss;

• Phosphate fertilizers: Prices remain firm, supported by both exports and costs, though monoammonium phosphate (MAP) is encountering resistance in destocking;

• Potash fertilizers: International tight balance and domestic wait-and-see sentiment are intertwined, leading to slight price easing.

Overall, the tug-of-war between raw material costs and end-user demand has become the core contradiction in the market.

I. Raw Material Market: Significant Regional Divergence, Uneven Cost Support

1. Phosphate Rock: North–South Supply–Demand Imbalance, Clear Price Gradient

(1) Domestic Market: Tight in the North, Stable in the South; Transportation and Inventory as Key Variables

• Supply Structure:

  
  

  In the North, production continues to decline due to ongoing environmental inspections, leaving supply tight. In the South, production and sales remain insufficient: inventories in Guizhou are rising, outbound shipments from Shuifu, Sichuan are limited by transportation restrictions, while Mabian offers discounted blending ore to boost sales.

• Demand and Inventory:

  
  

  Downstream phosphate fertilizer plants are running at about 60% capacity. Exports are supporting short-term demand, but companies show little enthusiasm for stockpiling. Inventory pressure in Guizhou is relatively high. After next month’s orders are signed, prices are expected to remain stable.

(2) Import Market: Steady Inquiries, No Large Transactions

• Price Trends:

  
  

  Egyptian rock (26–27% grade) CFR at USD 80–90/ton; Jordanian sources quoted around USD 100/ton; Pakistani rock (28–30% grade) CIF USD 95–98/ton (mostly flowing to Guangdong, Shandong, and Yangtze River regions).

• Import Data:

  
  

  From January to July 2025, China imported 885,800 tons of phosphate rock (885,600 tons unground). July imports were 119,700 tons, with an average import price of USD 96.74/ton.

2. Sulfur: Rising Port Stocks, Intensified Domestic–International Price Game

• Inventory and Prices:

  
  

  Total domestic port inventory stands at 2.42 million tons, up 100,000 tons from the previous week. Along the Yangtze River, low-priced cargoes are scarce; small trades are closing at RMB 2,620/ton. Domestic Puguang–Wanzhou holds steady at RMB 2,570/ton; Dalian refinery’s starting price is RMB 2,460/ton (flat WoW); Shandong local refiners’ liquid sulfur is quoted at RMB 2,580–2,600/ton, with downstream players remaining cautious.

• Domestic–International Linkage:

  
  

  Middle East FOB has risen to USD 300–310/ton. Tight supply makes replenishment in China difficult, prompting strong price-holding sentiment among traders. However, downstream demand is weakening at the margin, and with October operating rates still uncertain, the short-term market is likely to stay in a fluctuating range.

3. Sulfuric Acid: Local Price Cuts, Regional Supply–Demand Driving the Trend

• Price Adjustments:

  
  

  Dragged down by weak fertilizer demand, prices in Hebei, Anhui, Shandong, Central China, and Hunan–Zhejiang dropped by RMB 20–50/ton. Yunnan 98% smelter acid is quoted at RMB 720–760/ton; Hubei 98% smelter acid at RMB 650–730/ton.

• Core Logic:

  
  

  Supply recovery pace and transport conditions vary significantly across regions, leading to imbalances. Short-term prices will continue to follow local supply–demand dynamics.

4. Synthetic Ammonia: North–South Divergence, Consolidation Persists

• Regional Performance:

  
  

  Prices remain firm in the Southwest due to plant maintenance, while in the North (Shaanxi, Shanxi) supply has increased with units resuming production. High-end prices have softened, while low-end prices are converging toward the Central region.

• Trend Outlook:

  
  

  Regional differentiation persists under transport radius limitations. In the short term, high-end prices are expected to stay weak, with the overall market remaining in a sideways consolidation pattern.

II. Core Fertilizer Market: Intensified Divergence

1. Urea: Supply–Demand Imbalance Breaks Cost Line, Industry Reshuffling Begins

(1) Prices and Loss Situation

Domestic ex-factory prices generally fell to RMB 1,600–1,700/ton, with the lowest in Northwest China at RMB 1,520/ton—breaking through the cash cost line of nearly 30% of enterprises. The industry has entered a stage of widespread losses.

(2) Supply–Demand and Inventory Contradictions

• Supply Side: Daily output is around 190,000 tons (down from 200,000 tons previously). However, after production restrictions around Beijing–Tianjin end, capacity will be released. Coupled with liquid ammonia shifting to urea production, this “forced production increase” makes it difficult to realize output cuts for price stabilization.

• Demand Side: Compound fertilizer operating rates are below 40% (production = immediate losses). Distributors at the grassroots level face extended inventory digestion cycles. Farmers, hit by natural disasters and falling planting returns, show low fertilizer application enthusiasm.

• Inventory Side: As of September 5, Chinese enterprises held inventories of 1.2142 million tons (up 16,500 tons WoW), and port inventories were 620,900 tons (up 3.48% WoW). A vicious cycle has formed where “upstream refuses to cut, downstream dares not buy.”

(3) Export Dilemma

India’s September tender settled at USD 464.7/ton CIF. However, due to exchange rate fluctuations, weaker international prices (Middle Eastern sources more competitive), and China’s export quota restrictions, the awarded volume remains uncertain—making it difficult to ease domestic oversupply pressure.

2. Phosphate Fertilizers: Cost Support, MAP Weak vs. DAP Firm

(1) Monoammonium Phosphate (MAP): Limited Effect of Price Cuts on Inventory Reduction, Pressure Rising

• Prices and Inventory: Hubei 55% MAP powder RMB 3,300–3,350/ton; Hubei 73% industrial-grade MAP RMB 5,700–5,800/ton. Agricultural demand is weak, and demand from the lithium iron phosphate (LFP) sector is slowing, pressing raw material prices downward. Enterprises face growing inventory pressure, with some small plants at risk of overstock. Price cuts have limited effect on destocking.

• Key Constraints: Downstream compound fertilizer buyers only purchase in small, just-in-need quantities. Weak agricultural demand, combined with high raw material costs squeezing margins, may further reduce operating rates.

(2) Diammonium Phosphate (DAP): Export and Cost Support Keep Prices Firm

• Prices and Supply: Hubei 64% DAP granules RMB 3,800–3,850/ton. High-grade 64% DAP is tight domestically due to exports, while lower-grade supplies are sufficient.

• Demand Support: Ethiopia’s 540,000-ton and Bangladesh’s 116,500-ton DAP tenders boosted international market sentiment. China’s Phase II export quota exceeds 800,000 tons (to be registered before October 15). Market mood is relatively strong.

3. Potash Fertilizers: International Tight Balance, Domestic Market Waiting for Demand

(1) Domestic Market: Slight Price Easing, Low Inventories Facing Cautious Demand

• Prices and Inventory: Imported potassium chloride prices are softening, with 62% white potash offers adjusted down (some producers suspending quotations). Port inventories have fallen below 1.6 million tons (down 49.6% YoY), but rumors of increased imports from Laos have shaken market sentiment.

• Market Dynamics: More small-scale quotations are emerging in an attempt to hold the market, but demand remains weak (farmers reluctant to plant). If demand does not pick up by mid-to-late September, high-price support may collapse.

(2) International Linkage: Tight Supply–Demand Balance Provides Long-Term Price Support

Russia and Belarus reduced production in H1, while BHP’s Canadian project has been delayed until 2027—leaving a significant capacity gap. Indonesia’s imports surged 48% YoY to 2.56 million tons, and Brazil’s granular potash CFR price reached USD 360/ton (up 22% YoY). The international tight balance provides a long-term support base for China’s domestic potash market.

III. Market Outlook and Risk Alerts

1. Outlook by Product Category

• Urea: Close attention should be paid to India’s tenders and the start of China’s off-season stockpiling. The accelerated phase-out of backward production capacity is inevitable.

• Phosphate Fertilizers: MAP expected to remain weak but stable (limited by destocking pressure), while DAP is likely to stay firm to strong (supported by exports and costs).

• Potash Fertilizers: After import prices ease, they are expected to stabilize. The pace of autumn fertilizer preparation will be the key factor, while the international tight balance provides a long-term support base.

• Raw Materials: Phosphate rock prices are expected to remain stable; sulfur will continue fluctuating under market games; synthetic ammonia will maintain regional divergence.

✅ Conclusion: The Chinese fertilizer market (September 5–11, 2025) is characterized by a tension between cost support and weak final demand. While DAP and raw material sulfur remain supported by exports and international prices, the urea market is under severe pressure, accelerating the structural transformation of the industry.

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.