Fertilizer Market Briefing – Mid to Late September 2025

This week, China and overseas fertilizer markets continued the pattern of “cost support vs. weakening demand,” driven by the interplay of raw material price divergence, sluggish downstream demand, and international policy adjustments. Below is a summary of the main market dynamics:

China Market Dynamics

(I) Raw Material Market: Supply–Demand Divergence Intensifies, Price Trends Differ by Product

1. Phosphate Rock: Prices Stable but Regional Inventories Diverge

• Domestic Market: Prices remained unchanged, with mines and traders mainly fulfilling existing orders, while new transactions were cautious. In the north, supply was tight due to environmental inspections; in southern main production areas, output and sales were insufficient. Inventories in Sichuan and Guizhou gradually accumulated, and Sichuan’s outbound logistics were constrained by road repairs.

Downstream phosphate fertilizer production declined overall; monoammonium phosphate (MAP) producers anticipated reduced operating rates, while diammonium phosphate (DAP) maintained high operating levels supported by exports.

However, DAP output is expected to decline from the end of September to mid-October as export orders wind down.

• Import Market: Recent transactions were limited, with few large deals.

Egyptian rock (26–27% grade) was quoted at USD 80–90/MT CFR, Jordanian rock at about USD 100/MT, and Batam rock (28–30% grade) traded at USD 95–98/MT CIF, with 25% grade quoted at USD 70/MT CFR. Most cargoes flowed to Guangdong, Shandong, and the Yangtze River Basin.

From January to August 2025, China imported a total of 1.0162 million tons of phosphate rock , including 10 shipments from Egypt and 6 from Jordan; imports in August were 130,400 tons.

2. Sulfur: Volatile Uptrend Supported by External Market, Demand Concerns Persist

• Inventory & Prices: Total port inventory stood at 2.39 million tons, down slightly from last week. Market rumors that Qatar awarded 35,000 tons of solid sulfur at USD 333/MT FOB stimulated bullish sentiment among traders, who held back sales, pushing spot prices upward.

• Market Outlook: High overseas prices made low-cost restocking difficult, keeping trader sentiment firm. However, competing sulfuric acid prices continued to fall, and phosphate fertilizer producers face a high probability of lowering operating rates. The market is expected to remain broadly volatile before the holiday.

3. Sulfuric Acid: Nationwide Decline, Regional Supply–Demand Drives Adjustments

• Price Trends: Prices fell by RMB 40–170/MT this week. North China saw declines due to pressure from low-priced surrounding markets, East China suffered from weak downstream buying, and Central China faced mounting sales pressure. In Yunnan, 98% smelter acid was delivered at RMB 610–640/MT; in Hubei, 98% smelter acid was delivered at RMB 490–560/MT.

• Driving Factors: With sluggish phosphate fertilizer transactions and weak demand, the market lacked short-term bullish support. Each region adjusted prices based on its own supply–demand balance.

4. Synthetic Ammonia: Regional Divergence Evident, Short-Term Weak Consolidation

• Price Fluctuations: Prices rose in northern regions due to supply tightening, but fell in southern regions under high-cost pressure. In Central China, increased supply drove prices down, while in Southwest China prices remained stable with demand mainly rigid.

• Market Pattern: Overall supply increased significantly, weighing on transactions. Restricted by transport radius and regional supply–demand differences, prices remained divergent. In the short term, weak consolidation is expected to continue.

(II) Finished Products: Weak Demand, Cautious Enterprises

Phosphate Compound Fertilizers: Depressed Sentiment, Intensified Tug-of-War Between Domestic/External Demand and Costs

• Market Sentiment: Transactions were sluggish, new orders were limited, and traders remained cautious with a generally bearish outlook.

• Product Divergence: MAP inventories continued to accumulate, forcing enterprises to reduce operating rates; 64% DAP supply in the domestic market was tight due to export support; industrial-grade MAP relied solely on demand from the new energy sector, with little agricultural consumption.

• Cost Impact: The sharp decline in sulfuric acid prices loosened cost support, while sulfur hovered at high levels under external market support, leaving producers caught between cost pressure and weak demand.

Potash Fertilizers: Supply–Demand Tug-of-War, Prices Unlikely to Drop Sharply in the Short Term

• Supply–Demand Imbalance: Domestic potash production and port inventories both dropped to a five-year low. 60% white potash delivered price was RMB 3,100–3,200/MT, while 62% white potash ex-port pickup price stood at RMB 3,150–3,400/MT, though supply was insufficient; quotations were suspended in Yantai and Qingdao.

On the demand side, compound fertilizer operating rates remained below 50%, finished product inventories piled up, and farmers stayed cautious due to grain price fluctuations. SOP producers (52% fully water-soluble powder ex-factory price near RMB 3,900/MT, close to cost line) maintained only 40% operating rates.

• Price Outlook: In the short term, prices are unlikely to fall sharply due to cost support. October border trade contract negotiations may result in increases, though weak demand will cap gains. If autumn fertilizer demand revives, SOP could see a mild rebound.

Urea: Export Growth Cannot Alter Loose Supply–Demand Balance

• Imports, Exports & Inventory: Since May 2025, an export quota system has been implemented (first three batches totaling about 4 million tons). Exports in August reached 800,000 tons, with a cumulative total of 1.44 million tons from January to August (up 492.3% YoY). Total enterprise inventories stood at 1.1327 million tons (up 50% YoY), a five-year seasonal high.

• Supply, Demand & Profitability: In the second week of September, operating rate reached 79.34% (up 1.24 percentage points WoW), with daily output around 190,000 tons. Output is expected to recover later as maintenance ends and new capacity is released (new plants in Q4; daily output may exceed 210,000 tons in 2026). Agricultural demand remained in the off-season, while industrial demand was weighed down by a sluggish real estate sector. Corporate profits declined year-on-year.

Overseas Market Dynamics

(I) Egypt: Increasing Fertilizer Exports to Offset Energy Subsidy Cuts

The Egyptian government plans to raise industrial natural gas prices by USD 1–2 per MMBtu, while simultaneously increasing the fertilizer export quota from 45% to 55%. At the same time, the domestic fertilizer procurement price for farmers will rise from EGP 4,500/ton to EGP 6,000/ton, with the government pledging to ensure natural gas supply for factories. These measures aim to cushion the impact of subsidy cuts on heavy industry.

Industry Background: Fertilizer and petrochemical industries account for 16% of Egypt’s domestic natural gas consumption, with natural gas making up 70% of their production costs. In recent years, Egypt’s energy deficit has intensified, with industrial shutdowns caused by repeated gas supply interruptions.

The latest policy adjustment will reshape the “natural gas subsidy – fertilizer subsidy” transmission mechanism, with far-reaching effects on both international supply chains and the domestic agricultural system.

(II) Pakistan: Fertilizer Consumption Surged in August, Inventories Well Secured

According to NFDC, Pakistan’s fertilizer consumption in August 2025 grew by 53.4% year-on-year, with cumulative growth of 15.9% during the Kharif season (April–August). In August alone, urea consumption reached 2.676 million tons (+12.4%), while DAP consumption stood at 552,000 tons (+8.7%). Nitrogen fertilizer usage rose 50.7%, phosphate fertilizer usage increased 69.3%, and potash fertilizer usage grew 49.3%, reflecting strong agricultural demand during the Kharif season.

Domestic production in August was 835,000 tons (including 597,000 tons of urea), while DAP imports totaled 50,000 tons. NFDC projects that for the remainder of 2025, available urea supply will be 4.27 million tons (against expected demand of 3.17 million tons), and DAP supply will be 1.017 million tons (demand 703,000 tons), ensuring sufficient availability.

(III) Bangladesh: Approval for 95,000 Tons of Fertilizer Imports

On September 23, the Bangladeshi government approved three import contracts:

• Import of 30,000 tons of urea from SABIC (Saudi Arabia) at about USD 447.5/ton;

• Import of 30,000 tons of urea from Kafco at about USD 414.87/ton;

• Import of 35,000 tons of potassium chloride from Russia’s Prodintorg at about USD 361/ton.This batch will be used to secure domestic agricultural demand.

Conclusion & Outlook

This week, the market continued the trend of “raw material costs fluctuating at high levels while downstream demand remains under pressure.” In China, phosphate fertilizer transactions were sluggish, urea supply pressure persisted, and potash prices were unlikely to fall sharply in the short term due to low inventories.

Internationally, both policy and demand acted as dual drivers: Egypt sought to mitigate energy cost pressures by releasing fertilizer export capacity, while strong procurement demand from Pakistan and Bangladesh injected vitality into the regional market.

Overall, in the short term, the Chinese market will remain characterized by cautious sentiment and inventory-driven dynamics, while policy orientation and import demand in overseas markets will serve as key variables supporting the global fertilizer outlook.