China Fertilizer Market Brief - July to Early August 2025

I. Summary of China’s Fertilizer Import and Export Data for July

Preliminary statistics from China Customs indicate that from January to July 2025, China’s fertilizer trade showed a trend of “significant export growth and slight import decline.”

• Exports:

  
  

  A total of 22.831 million tons of various bulk fertilizers were exported, up 45.7% year-on-year, with an export value of USD 6.151 billion, up 49.3% year-on-year.

  
  

  July alone recorded an exceptional performance: 5.704 million tons exported, up 85.7% year-on-year, with an export value of USD 2.083 billion, up 134.6% year-on-year. These figures highlight the strong international demand for Chinese fertilizers.

  
  

• Imports:

  
  

  From January to July, China imported 7.615 million tons of various fertilizers, down 5.0% year-on-year, with an import value of USD 2.429 billion, down 10.6% year-on-year.

  
  

  In July, imports reached 677,000 tons, with a value of USD 248 million. The average CIF import price was USD 366.32 per ton. The decline in import volume reflects the substitution effect of increased domestic production capacity on imported products.

II. Accelerated Autumn Fertilizer Production, Stable Yet Optimistic Compound Fertilizer Market

The pace of autumn fertilizer production is gradually accelerating, with operating rates at compound fertilizer enterprises in many regions showing a clear increase. Downstream utilization rates of compound fertilizer capacity have also risen slightly, and more buyers are entering the market for autumn fertilizer purchases, creating expectations of concentrated procurement by distributors.

At present, China’s compound fertilizer market shows little overall change, with trading activity remaining subdued. As the autumn fertilizer preparation period approaches, producers are gradually shifting production toward autumn wheat fertilizers. However, since the actual application period for wheat fertilizer is still some time away, downstream distributors are moving slowly in their purchasing schedules, leading to a slight buildup in producers’ inventories.

Although raw material prices have shown minor fluctuations recently, cost support remains, prompting most enterprises to keep their quotations stable. It is expected that as the concentrated stocking period for autumn fertilizer arrives, prices in certain regions may see a slight upward adjustment.

III. Potash Fertilizer Market: Supply-Demand Tug of War and Price Divergence

1. Overall Market Situation

China’s potash fertilizer market remains in a wait-and-see mode. Port inventories are declining, traders’ stocks are tight, and overall prices are holding steady. For resource-based potassium sulfate producers, summer maintenance has limited supply, and with policies yet to be clarified, most transactions are conducted through one-on-one negotiations, reflecting an ongoing supply-demand stalemate.

In the potassium chloride market, supply remains generally tight, with some traders having no goods available for sale, prompting slight upward price adjustments. Since policy measures mandated several large enterprises to release potassium chloride at low prices to guide market trends, the market has shifted from being supply-demand driven to policy driven.

2. Potassium Chloride Market: Policy-Driven and Supply-Constrained

• Supply Circulation:

  
  

  Policy regulation plays a decisive role in the potassium chloride market. Large traders continue low-price supply strategies, with most shipments going directly to downstream compound fertilizer producers, leading to a continued reduction in overall market circulation.

  
  

  As of August 7, port potassium chloride inventories had fallen to around 1.8 million tons, down nearly 1 million tons from the same period last year, further tightening supply. Domestic potassium chloride producers are gradually resuming production, but most new orders are supplied directly to compound fertilizer plants. Traders’ available stocks remain limited, small and medium-sized enterprises are under consolidation pressure, and overall supply capacity has not yet been fully released.

  
  

• Price Situation:

  
  

  Market prices are polarized—large traders maintain lower quotes to secure supply, while small traders, constrained by limited stocks, set higher prices. Prices for Lao white potash and 62% white potash remain high, mainly supported by specific demand from processing enterprises, although the overall market lacks fresh order momentum.

  
  

• New Market Dynamics under Policy Regulation:

  
  

  Earlier, several major enterprises released potassium chloride to compound fertilizer producers at below-market prices, causing a temporary price drop and weakening market sentiment. However, with insufficient imported potassium chloride arrivals and limited inventories among most traders, circulating supply remains tight. Policy regulation has not changed the fundamental supply shortage, and market confidence is gradually recovering, with bearish sentiment easing.

  
  

3. Potassium Sulfate Market: Cost Pressure and Slight Price Decline

Compared with potassium chloride, the potassium sulfate market faces greater challenges. Mannheim-process potassium sulfate producers are operating at less than 50% capacity, with some plants shutting down for maintenance for over 30 days. Despite this, social inventories remain above 200,000 tons, and the oversupply situation has not fundamentally improved.

On pricing, mainstream domestic Mannheim potassium sulfate producers have reduced quotations by 50–100 RMB/ton compared with late July. Market prices for 52% powder products are concentrated in the RMB 3,850–4,000/ton range, while high-grade products show greater price volatility. Weighed down by high production costs, new orders are sluggish, and there is more room for price negotiations. Resource-based producers, affected by maintenance, have kept quotations stable, with transactions mainly negotiated individually.

4. Supply-Demand Analysis and Market Outlook

• Supply Side:

  
  

  Imported potash arrivals remain insufficient, while domestic potash is prioritized for supply to compound fertilizer enterprises, leaving the circulating market short of goods. Border trade replenishment is limited, and short-term supply tightness is unlikely to change.

  
  

• Demand Side:

  
  

  Autumn fertilizer stocking is driving higher operating rates at compound fertilizer plants, keeping potash procurement demand stable. However, restocking efforts from chemical and processing enterprises are relatively weak, showing a clear divergence in demand.

  
  

• Outlook:

  
  

  The “dual pricing system” in the potash market remains. Supply shortages are encouraging traders to withhold sales. If import replenishment falls short of expectations or demand strengthens further, localized high prices may reappear. For potassium sulfate, cost-price inversion means a short-term rebound is unlikely, and the market may continue its weak, fluctuating trend.

IV. Urea Market: Volatile Consolidation with Limited Upward Momentum

In recent days, China’s urea market has continued to show a volatile consolidation pattern, with prices rising early in the week before retreating, resulting in limited overall fluctuations. A brief boost in sentiment was seen on news of potential exports, but once policies were confirmed, the positive impact proved limited. The market returned to a stalemate, with no clear directional guidance, and the supply-demand tug of war persists.

1. Prices and Market Sentiment

Driven by news of India’s urea tender and rumors about export policies, market sentiment briefly improved in early August, prompting some producers to tentatively raise their quotations. However, once the policies were finalized, the scope of the benefits proved limited, sentiment cooled rapidly, and prices retreated after the initial rise. At present, the market lacks a clear direction, supply-demand competition continues, and policy adjustments in China have also dampened sentiment, leading to a decline in urea futures.

2. Supply and Demand

• Supply Side:

  
  

  The Chinese urea industry is experiencing both equipment failures and recoveries. Short-term shutdowns for maintenance are increasing, slightly lowering capacity utilization. Current urea output stands at 1.3285 million tons, down 26,300 tons week-on-week (-1.94%). However, daily average output still exceeds 190,000 tons, keeping supply relatively ample.

  
  

• Demand Side:

  
  

  In August, agricultural demand for urea has entered the off-season, leading to a marked decline in usage. On the industrial side, compound fertilizer plants have slightly increased operating rates, but due to unstable market conditions, procurement remains cautious and focused on buying at dips. Other industrial sectors, such as panel and plywood manufacturing, show weak performance, leaving overall demand without clear growth drivers.

  
  

3. Inventory and Market Outlook

Stimulated by news of the Indian tender, urea plant order intake improved, and in some regions, maintenance shutdowns accelerated inventory drawdowns, resulting in an overall decline in producer inventories. However, as downstream restocking winds down and with export transactions limited, inventories at enterprises may face mild accumulation pressure under weak domestic demand.

Currently, the urea market is characterized by ample supply, weak demand, emerging inventory pressure, and limited export influence. Without new positive drivers, the market is likely to remain in a volatile-to-weak trend.

Summary

In July, China’s fertilizer trade data stood out, with exports surging and imports slightly declining—highlighting the country’s competitiveness in the international market and the improvement in domestic production capacity.

The acceleration of autumn fertilizer production brings some optimism to the compound fertilizer market; although current trading is subdued, prices may see mild upward movement in the coming period. The potash fertilizer market faces intense supply-demand competition, clear price divergence, and a supply-tight situation that is unlikely to ease in the short term. The urea market remains in a phase of volatile consolidation, with limited upward momentum.

Overall, different fertilizer categories are showing distinct market trends. Going forward, close attention should be paid to policy adjustments, supply-demand changes, and international market developments in order to better anticipate market directions and ensure stable agricultural production.

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.