As we enter the latter half of March, preparations for spring plowing and fertilizer procurement continue to advance. Driven by a combination of robust policies aimed at ensuring supply and stabilizing prices, along with the market’s own self-regulatory mechanisms, tensions in the domestic potash market have eased somewhat. While potash chloride supply shows signs of marginal improvement, cost pressures on potassium sulfate remain. Amid complex market dynamics, the overall market has demonstrated stability at elevated levels with narrowing volatility, highlighting the role of policy as a “stabilizer.”

Potassium Chloride: Improved Supply, Prices Consolidating at High Levels

Recently, domestic potassium chloride supply capacity has been effectively boosted, easing market expectations of a “tight supply” and providing fundamental support for price stability.

Supply-side data is sending positive signals. According to the latest industry data, domestic potassium chloride producers have shown increased enthusiasm for production. The weekly operating rate rebounded to approximately 46%, with weekly output reaching about 87,000 metric tons—an 8.75% increase from the previous week—indicating a clear upward trend in supply. Regarding inventories, factory stockpiles remain at historically low levels year-over-year, but this week saw a 2% increase from the previous week, signaling a positive start to inventory buildup. Although port inventories declined slightly from last week, absolute levels remain ample.

Prices have stabilized amid narrow fluctuations. Under the dual influence of improved supply and policy expectations, the potash market has not experienced a one-sided upward trend but has instead shown structural minor adjustments. Data indicates that on March 16, the mainstream price for 60% domestic potash rose slightly by 50 RMB/ton, while the mainstream price for 62% Russian-Belarusian potash retreated by 30 RMB/ton compared to the previous day. This mixed trend of rises and falls clearly reflects the market’s search for a new equilibrium. The prevailing market view is that, supported by cost factors, policy interventions, and gradually improving supply-demand fundamentals, potassium chloride prices no longer have the conditions for significant volatility and are expected to remain in a high-level consolidation pattern.

Market sentiment is becoming more rational. Operating rates at downstream compound fertilizer plants are steadily recovering, providing firm support for potassium chloride demand. However, given current price levels and the government’s continued signals to ensure supply and stabilize prices, procurement behavior among mid- and downstream players has generally become more cautious. Market transactions are primarily focused on replenishing inventories as needed and placing small orders, with a reduction in large-scale stockpiling. This rational procurement strategy helps stabilize market sentiment and prevents prices from deviating from fundamentals due to speculative trading.

Potassium Sulfate: Persistent Cost Pressures, Market in a Stalemate

Unlike the marginal improvement in the potassium chloride market, the potassium sulfate market continues to face the dual challenges of “high costs” and “weak demand,” with overall operations under pressure.

Cost pressure remains the core issue. The primary costs of potassium sulfate stem from its raw materials: potassium chloride and sulfuric acid. Although local prices for potassium chloride have eased slightly, the overall decline has been limited, and cost support for potassium sulfate remains strong. At the same time, sulfuric acid prices have maintained a firm upward trend, further intensifying operational pressure on Mannheim-process potassium sulfate producers, with some enterprises still facing the dilemma of price inversion.

Demand-side support remains limited. Although spring fertilizer stockpiling continues, end-user compound fertilizer manufacturers have limited acceptance of the current high prices for potassium sulfate feedstock. Downstream procurement strategies remain focused on replenishing essential inventory, with new order transactions remaining sluggish, making it difficult to effectively drive up potassium sulfate prices. Weak demand has directly led to industry operating rates remaining at medium-to-low levels, dampening manufacturers’ production enthusiasm.

Prices remain weak but stable, with the market in a stalemate. Caught between strong cost support and weak demand, potassium sulfate market prices lack upward momentum, while downward pressure is constrained by costs, resulting in an overall stalemate with weak stability. Average market prices fluctuate within a narrow range; for example, on March 16, the average price rose only slightly by 10 RMB per ton compared to the previous day. Market sentiment is heavily dominated by a wait-and-see attitude, with most industry players awaiting clearer directional signals.

Market Outlook: Policy Stability Provides Support; Market Seeks Balance Amid Stability

Looking ahead, the domestic potash fertilizer market will operate under the clear policy expectation of “ensuring supply and stabilizing prices,” and price stability will be significantly enhanced.

The primary factor is policy certainty. Macroeconomic regulation at the national level has established a clear “ceiling” for the fertilizer market, and any irrational price increases deviating from fundamentals will be strongly curbed. The sustained implementation of these policies serves as a guiding star for stabilizing market expectations and promoting rational market behavior.

Supply and demand fundamentals are expected to continue a gradual recovery. As domestic potash production rates continue to recover, self-sufficiency will gradually strengthen, helping to alleviate supply tightness concerns at the source. Relatively ample port inventories also provide a buffer for the market. Demand growth will follow seasonal patterns more closely, progressing steadily, making it unlikely that explosive growth will drive prices higher. Strategic Choices Amid a Divided Market Landscape.

The potassium chloride market is expected to consolidate within the current price range, primarily driven by the pace of domestic supply recovery and changes in international costs. A turnaround in the potassium sulfate market, however, will depend more on trend-based changes in the price of its raw material, potassium chloride, as well as improvements in its own supply-demand structure. Under regulatory oversight, significant price increases for both products are unlikely.

Overall, the potash fertilizer market is currently in a critical transition phase from “supply concerns” to “supply-demand rebalancing.” It is recommended that all market participants view short-term price fluctuations rationally, focus more on the progress of domestic capacity release and policy directions, ensure fertilizer demand for spring plowing through prudent operations, and jointly maintain the stable and orderly operation of the market.

As an integrated internet platform providing benchmark prices, on March 20, the Sunsirs benchmark price for potassium chloride stood at 3,616.67 RMB/ton, representing a decrease of 1.36% compared to the beginning of the month (3,666.67 RMB/ton). Meanwhile, the benchmark price for potassium sulfate was 3,983.33 RMB/ton, an increase of 6.13% compared to the beginning of the month (3,753.33 RMB/ton).

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