In early 2026, the compound fertilizer market maintained robust stability. On one hand, favorable opening-day performance in certain raw material markets provided cost-side support. On the other hand, tightening compound fertilizer supply coupled with sustained winter stockpiling demand created favorable conditions from the supply-demand perspective.

01 Compound Fertilizer Prices at Mid-to-High Range of Five-Year Cycle

Taking 45% balanced sulfur-based compound fertilizer as an example, the domestic average price stood at 3,118 yuan (per ton, same below). At the start of 2026, this price reached a five-year high, falling 190 yuan short of the peak of 3,308 yuan but exceeding the 2025 year-on-year price of 2,705 yuan by 413 yuan.

The firm price trend in early 2026 was largely driven by rising raw material costs in the fourth quarter of 2025. At the start of this year, continuously rising urea prices pushed up the cost of high-nitrogen fertilizers, prompting enterprises to raise their prices. However, due to the presence of earlier low-priced inventory in the market, downstream buyers showed limited willingness to accept the higher prices.

02 Capacity Utilization Rises from Low Levels

In early 2026, enterprises that had previously curtailed production due to environmental factors gradually resumed operations, leading to a steady recovery in compound fertilizer capacity utilization from low levels. By January 12, capacity utilization had increased to 37.17%, while finished product inventories at sampled enterprises showed a downward trend.

In early 2025, while the utilization rate showed a dip followed by a rebound due to holidays, sample enterprises maintained relatively high inventory levels. Conversely, inventory declined rather than increased in early 2026, indicating stable sales during the recent winter fertilizer stockpiling period.

Around the Spring Festival, lower capacity utilization is expected to reduce output. With only three to four weeks from mid-January to early February for compound fertilizer enterprises to build inventories, while existing pre-delivery orders continue to ship, inventories are projected to remain at moderate levels around the holiday. Enterprises will likely reduce prices to clear stockpiles.

03 Raw Material Costs Remain Stable in the Short Term

The recent three-month price increase in compound fertilizers has been primarily driven by rising raw material costs.

In the short term, the price trend for phosphorus raw materials in compound fertilizers is expected to remain stable. However, medium-to-long-term considerations must account for international factors. Similarly, the price trajectory of potash fertilizers requires monitoring supply changes from major global producers. For nitrogen fertilizers, urea prices are fluctuating, with medium-to-long-term market sentiment influenced by factors such as export policies.

Overall, raw material costs for compound fertilizers will remain firm in the near term. Longer-term trends remain uncertain due to unresolved factors and warrant continued monitoring.

In summary, influenced by stable raw material costs, a tight short-term supply-demand balance, and delayed winter stockpiling demand, compound fertilizer prices are expected to remain relatively stable from January to February.

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