Potash fertilizer supply and demand are in a tight balance, and international potash fertilizer prices continue to rise. China is the world's largest consumer of potash fertilizer, but its resources are relatively insufficient, with import dependence exceeding 60%. In 2024, China's potassium chloride production is expected to be 5.5 million tons, a YOY decrease of 2.7%, while imports will reach 12.633 million tons, a YOY increase of 9.1%, a record high. By the end of August 2025, domestic potassium chloride port inventories will be 1.63 million tons, a decrease of 1.51 million tons, or 48.14%, compared to the same period last year.

As food production security becomes increasingly important, domestic potash fertilizer safety stocks are expected to increase to over 4 million tons. In August, the domestic potassium chloride market fluctuated strongly amid a tight supply-demand balance. At the end of August, the average market price of potassium chloride was 3,284 yuan/ton, a 1.67% increase from the previous month and a 35.87% increase from the previous year. Continued tight supply was the core factor supporting the market. Domestic potassium production continued to decline, with direct shipments primarily from suppliers. Imported potassium arrivals were limited, and port inventories remained low, resulting in a tight spot market. At the end of the month, the China-Russia border potash fertilizer contract for September was signed, resulting in a price increase of $5/ton month-on-month, providing slight cost support to the market.

The prosperity of the phosphate chemical industry depends on the price of phosphate rock. It is optimistic that the long-term price of phosphate rock will remain high. Over the past two years, the grade of mineable phosphate rock in my country has declined, increasing the difficulty and cost of mining. The time required to bring new production capacity online is long, while demand from new downstream sectors, such as lithium iron phosphate, continues to grow. This has led to a tight supply and demand situation for domestic phosphate rock, and the scarcity of phosphate rock has become increasingly prominent. The market price of 30%-grade phosphate rock has remained in the high range of 900 yuan/ton for over two years. According to Baichuan Yingfu, as of August 29, 2025, the tax-inclusive shipboard price of 30%-grade phosphate rock in Hubei was 1,040 yuan/ton, and the ex-yard price of 30%-grade phosphate rock in Yunnan was 970 yuan/ton, both remaining unchanged from the end of the previous month.

The price gap between domestic and overseas phosphate fertilizers has widened. The 2025 phosphate fertilizer export policy will continue the principle of total quantity control, The export quota has been reduced compared to last year, but the export window is concentrated from May to September, and the legal inspection time has been optimized to half a month. Export quotas will be issued in two batches, with the first concentrated during the peak period from May to September. On August 29th, the difference between the Baltic Sea FOB spot price of monoammonium phosphate and the market price in Hubei Province was approximately 1,599 yuan/ton; the difference between the FOB price of diammonium phosphate in China and the market price in Shandong Province was approximately 1,540 yuan/ton. Currently, overseas phosphate fertilizer prices are significantly higher than domestic prices. Companies with phosphate fertilizer export quotas are expected to benefit from the increased profits brought about by the high price gap between domestic and overseas phosphate fertilizers.

From Guoxin Stock