China’s Potash and Raw Material Market Outlook at the End of November 2025: A Deep Tug-of-War Between Costs and Weak Demand

By the end of November 2025, China’s fertilizer market displayed clear structural characteristics:

While the potash sector benefited from the newly signed annual import contract that set a cost floor, downstream demand remained weak, limiting actual transactions and keeping the market in a state of fragile stability.

Conversely, upstream raw materials such as phosphate rock, sulfur, and sulfuric acid showed structural upward trends driven by tight supply or cost-push effects.

These two forces have formed a dual-sided battle between “demand suppression” and “cost elevation,” further increasing the complexity of market operations.

I. Potash Sector: Annual Contract Defines Cost Center, but Supply–Demand Stalemate Persists

China’s potash market continues to exhibit a clear “weak and steady” pattern. Potassium chloride (MOP) prices have shown slight corrections, while potassium sulfate (SOP) prices remain firm but with sluggish transactions.

Although the 2026 annual import contract injected cost certainty into the market, weak demand has prevented the sector from emerging from its current stalemate.

(1) Potassium Chloride (MOP): Slight Price Correction, Sluggish Trading Sentiment

The potassium chloride market has recently shown signs of weakness, with mainstream product prices declining slightly. Market activity remains low, with major traders mainly supplying downstream factories through directional shipments, resulting in a subdued trading atmosphere.

Demand remains the key constraint. Compound fertilizer producers currently hold sufficient inventories and have limited willingness to accept high potash prices. Purchases are primarily for rigid replenishment, with no sustained incremental demand.

A key event occurred on November 23, when the Chinese potash import negotiation team finalized the 2026 annual potash import contract with Food Security Supply Chain Co. (Dubai) at USD 348/ton (CFR).This price is lower than the 2024 contract level and continues China’s advantage as a global price lowland.

The contract establishes a clear cost-support line for China’s market, easing concerns over rising import costs. However, it did not immediately stimulate trading activity, as most traders have adopted a wait-and-see attitude, waiting for signs of downstream demand recovery.

(2) Potassium Sulfate (SOP): Cost Inversion Supports Firm Offers, but Transactions Face Resistance

In contrast to MOP, the potassium sulfate market shows a pattern of firm quotations but slow deal.

Mannheim-process SOP producers continue to face significant cost pressure due to high KCl feedstock prices and prolonged negative margins. This has kept operating rates low and reduced production enthusiasm, supporting firm price quotations.

However, downstream acceptance of current SOP price levels remains limited. New orders are mostly small batch purchases, with large-volume transactions significantly reduced. Supply–demand mismatch is becoming more prominent.

Regional divergence is increasing:

• Northeast China maintains slightly higher price levels supported by stable agricultural demand, though transactions remain limited to rigid needs.

  
  

• East and South China, where industrial fertilizer consumption is concentrated, continue to experience weakened demand due to slower macroeconomic recovery.

  
  

(3) Market Focus: Trader Shipment Pace & Impact of the Annual Contract

Current market attention centers on two variables:

1. Shipment pace of major traders

   
   

2. Transmission effect of the newly signed annual import contract.

   
   

Some traders are considering price concessions to ease inventory-financing pressure, yet downstream procurement does not show synchronized improvement, resulting in a “weak volume + weak price” stalemate.

A breakthrough depends on real improvement in demand. While the upcoming winter stocking season may increase raw material purchases by compound fertilizer producers and agricultural-support policies may boost demand, the short-term outlook still favors weak consolidation with limited price fluctuations.

II. Raw Material Market: Supply Constraints Drive Price Divergence Across Categories

Contrasting with the potash sector, upstream raw materials show pronounced divergence at the end of November, characterized by:

• North–south divergence in phosphate rock markets

  
  

• Sulfur remaining in high-level oscillation

  
  

• Sulfuric acid continuing an upward trend

  
  

• Synthetic ammonia experiencing localized price corrections

  
  

Supply-side constraints remain the core driver of upward pricing across most raw-material categories.

(1) Phosphate Rock: Divergent North–South Trends — Strong South, Weak North

Southwest regions such as Guizhou and Sichuan continue to see strong price sentiment, with producers showing reluctance to sell. Stable operating rates among downstream phosphate fertilizer plants provide additional demand support.

In contrast, northern regions, including Hebei, saw price reductions of around 10 RMB/ton, driven by downstream plant maintenance cycles and weaker demand support.

Notably, a recent rise in yellow phosphorus expectations has increased demand for high-grade phosphate rock used specifically for yellow phosphorus production.

Imports remain stable, with procurement largely on a demand-driven basis. Southern and Yangtze River basin plants remain the primary buyers.

(2) Sulfur: High-Level Oscillation Supported by Tight Supply–Demand Balance

China’s port sulfur inventory remains around 2.25 million tons, nearly unchanged from the previous week. After last week’s price spike dampened downstream enthusiasm, prices saw a brief correction.This week, as downstream factories pursued low-price replenishment, buying activity increased, prompting traders to raise quotations again—returning prices to an upward trajectory.

Market fundamentals remain strong:

• China’s sulfur arrivals remain significantly lower than historical averages

  
  

• The market is undergoing sustained de-stocking

  
  

• Demand continues to expand steadily

  
  

• Supply remains tight

  
  

Internationally, demand growth is expected to outpace supply expansion, reinforcing the global bullish structure and keeping prices at high levels. Future price trends will depend on the sustainability of downstream procurement.

(3) Sulfuric Acid: Rising on Combined Cost Support and Tight Supply

Sulfuric acid prices continued to rise this week.High sulfur prices provided strong cost support, while regional tight supply further pushed the market upward.

(4) Synthetic Ammonia: Localized Price Rebounds as Inventory Pressure Eases

Low-end prices in some regions rebounded this week.

Earlier price declines boosted downstream procurement interest, helping producers alleviate inventory pressure.

Regional divergence remains evident—some areas remain resistant to high-priced material, but easing inventories support continued low-end price recovery.

III. Market Outlook: Fragile Stability Meets Firm Raw-Material Support — Key Variables Will Shape the Trend

In the short term, China’s fertilizer market will likely maintain a structure of:

• Potash: weak but steady,

  
  

• Raw materials: firm to strong.

  
  

For potash:

• MOP is supported by the annual import contract, limiting downside potential

  
  

• SOP producers face cost inversion and are motivated to maintain firm prices

  
  

However, both products lack sufficient demand-side momentum for sustained price increases.

For raw materials:

• Southern phosphate rock strength is unlikely to change

  
  

• Northern prices may stabilize as downstream plants resume operations

  
  

• Sulfur and sulfuric acid remain supported by tight supply–demand balance

  
  

• Synthetic ammonia may enter sideways consolidation after localized rebounds

  
  

Key Variables to Watch

1. Winter stocking demand for potash, particularly from compound fertilizer producers

   
   

   • Stronger-than-expected procurement could break the current stalemate

     
     

2. Global potash and sulfur price volatility, especially:

   
   

   • Russian & Belarusian potash supply

     
     

   • Sulfur production dynamics in the Middle East

     
     

3. Inventory digestion by traders and producers

   
   

   • This will directly determine the scope and pace of subsequent price adjustments

     
     

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.