China's Fertilizer Market: Trends Under the Influence of Export Policies and Global Market Dynamics

Within the global fertilizer trade framework, China’s fertilizer market is significantly influenced by export policies and international market dynamics, resulting in complex price fluctuations and shifting supply-demand patterns.

1. Export Policy Adjustments Trigger Chain Reactions

Following the initial relaxation of mandatory inspection requirements (CIQ), Chinese fertilizer enterprises have seen a significant increase in pending export orders.

If the prices remain stable, the likelihood of a second round of export quotas being introduced is high.

A well-calibrated adjustment of export quotas would help enterprises expand into international markets, absorb excess production capacity, and enhance their global competitiveness.

2. Transmission of International Price Volatility to the Chinese Market

(1) Monoammonium Phosphate (MAP)

Internationally, MAP prices have been affected by the Middle East conflict, with fluctuations in sulfur prices—an essential raw material—driving changes in production costs.

From June to early July, the Chinese market saw a narrow range of price volatility due to the interplay between cost pressures and supply-demand dynamics. The ex-factory price for 55% powder MAP remained at RMB 3,350/ton, following the policy-imposed price cap.

After late July, if rigid demand for autumn fertilizer and export momentum are both released, prices are expected to rise moderately. However, high inventories of compound fertilizers and the ongoing need to balance nitrogen and potassium inputs will likely limit the price increase.

(2) Urea

Recently, international urea prices have risen significantly across the board, with weekly increases ranging from USD 20 to 60 per ton (equivalent to RMB 143–430/ton).

China's export prices for prilled urea quickly jumped from last week's USD 380–430/ton to USD 450/ton FOB, up USD 20–50/ton.

FOB prices for prilled urea in the Baltic and Black Sea regions also surged from USD 350–400/ton to USD 390–455/ton, with the largest weekly increase reaching USD 60/ton.

Although news of a temporary ceasefire between Israel and Iran once caused prices to retreat slightly, overall levels remain elevated.

India’s latest tender, requiring 2 million tons of urea to be shipped by August 22 (1 million tons to each of the west and east coasts), is expected to further push up global prices. China's export volume will be a key factor in balancing international supply, demand, and price trends.

(3) Potash Fertilizers

In China, potassium chloride (KCl) prices have been rising, with traders increasing quotations. However, downstream factories show low purchasing interest, and actual transaction volumes remain weak.

Potassium sulfate (SOP) prices have followed the upward trend, but high prices have hindered the signing of new orders, resulting in accumulating inventories and slower sales.For Chinese produced potash, the base cash ex-factory price for 60% KCl is set at RMB 2,700/ton (with other grades adjusted proportionally; freight excluded).Imported potash prices at port have also risen due to firm international prices, though most transactions are between traders, with downstream buyers remaining cautious.

While potash prices are temporarily supported by high costs, downstream resistance to high prices is strong. If low transaction volumes persist, traders or producers may consider minor price reductions to stimulate demand.Going forward, the market will need to monitor potash supply, the arrival of imported potash shipments, and autumn fertilizer procurement activity. Prices are expected to enter a high-level consolidation phase.

(4) Compound Fertilizers

In the compound fertilizer sector, the Chinese market is currently in a consolidation phase.

Among upstream materials, nitrogen prices are fluctuating slightly with a firm tone, MAP prices remain strong, and potash continues to rise—together keeping production costs for compound fertilizers at a high level in the short term.Currently, the market is in the early stages of autumn fertilizer preparation, but demand remains weak. Distributors show low enthusiasm for restocking, with most waiting for producers to announce new pricing policies for the autumn season.

The diammonium phosphate (DAP) market is in a state of stagnation and observation. Ex-factory prices remain largely unchanged, as producers focus on fulfilling export orders.Market demand remains sluggish, circulation is slow, and downstream buyers are making only limited purchases based on immediate needs. In the short term, the market is expected to maintain a narrow consolidation trend.

3. Outlook for China’s Fertilizer Market

Overall, under the combined influence of export policy adjustments and international market price fluctuations, different fertilizer categories in China are exhibiting varied price trends and supply-demand dynamics.

Looking ahead, market participants will need to closely monitor shifts in Chinese policy, global geopolitical developments, and the actual release of downstream demand. This will be essential for accurately gauging market conditions and making informed adjustments to production, procurement, and sales strategies.

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.