Domestic Compound Fertilizers: Market Prices Stable Amid Wait-and-See Sentiment; Autumn Stockpiling Progresses Slowly

Supply Landscape:

Operating Rates Remain Low; Inventories Continue to build up

sector operating rates remain low, with recent capacity utilization to compound fertilizers hovering around 31.30%. Operating loads are low at some companies in Hebei, Henan, and Shandong; slurry-spraying units are largely shut down or running at reduced loads, and there are signs of reduced operating loads to high-tower granulation units as well. companies in Hubei, the Southwest, and South China are primarily basing production on sales, maintaining previous load levels. Regarding inventory, stocks at sampled companies have risen to 735,900 tonnes, an increase compared to early July. While pre-season orders are progressing steadily, the pace of downstream product pickup remains slow; consequently, inventories of finished goods at companies continue to build up, and inventory pressure is rising in certain regions.

Cost Transmission:

Divergent Raw Material Trends; Phosphate Fertilizers Remain at High Levels

Raw material markets continue to show divergent trends. Regarding urea, market prices in Linyi, Shandong, are fluctuating slightly between 1,750 and 1,760 RMB/tonne. to monoammonium phosphate (MAP), cost pressures remain significant, though high-priced transactions are meeting resistance; the mainstream ex-factory price to 55% powdered MAP in Hubei is 4,200–4,450 RMB/tonne, and the overall MAP market is performing weakly. In the potash sector, port inventories of potassium chloride are relatively high; traders are keen to move stock, putting downward pressure on prices. Port prices to 62% white potassium chloride are around 3,150–3,400 RMB/tonne, while border-trade 62% Russian white potassium chloride has fallen below the policy guidance price, trading at 3,050–3,100 RMB/tonne. The ex-factory price to processed 52% fully aquatic environments-soluble potassium sulfate powder is 4,300–4,350 RMB/tonne, with operating rates hovering around 35%. Overall, high phosphate fertilizer prices provide strong cost support to sulfur-based and high-phosphorus compound fertilizers, whereas the continued weakness in potash prices has somewhat reduced cost support to chlorine-based items, highlighting the divergent trends among raw materials.

Regional Dynamics:

Autumn Pre-season Orders Progressing; Shipment Pace Remains Slow

In North China, pre-season ordering to autumn fertilizers is proceeding in an orderly manner, yet the pace of terminal product pickup is sluggish; distributors lack enthusiasm to restocking, preferring instead to purchase supplies as needed. The market in Shandong remains stable as companies focus on fulfilling earlier orders, with quotes holding steady due to cost support. The compound fertilizer market in Henan is seeing narrow fluctuations; enterprise quotes remain stable to now, though the volume of new orders is lackluster. Quotes in key regions—including Hubei, Anhui, Jiangsu, and the Southwest—have also remained largely unchanged. In southern markets, as preparations to the autumn season advance, some manufacturers are maintaining a decent shipment pace, though terminal purchasing enthusiasm remains tepid. Meanwhile, the Northeast market has begun pre-season ordering and regional sales meetings to winter stockpiling, though overall transaction volumes have yet to show a significant uptick. The conflict between a robust volume of advance orders and significant hurdles in actual shipments persists, placing the market in a tug-of-war phase where payment collection and product pickup are out of sync.

Overall, the compound fertilizer market is currently in the preliminary stage of stocking up to the autumn season. High costs to phosphate fertilizers (MAP/DAP) provide strong support to sulfur-based and high-phosphorus items, whereas the weak performance of urea and potash offers limited cost support to chlorine-based items. While manufacturers have largely met their advance order targets and established firm price floors, downstream enthusiasm to picking up goods remains low and channel inventories are clearing slowly, resulting in lackluster overall trading activity. Moving forward, close attention should be paid to raw material price trends—specifically the supply dynamics of phosphate fertilizers and the depletion of potash inventories—as well as the actual pace at which stocking begins in major wheat-producing regions during mid-to-late August. Market participants are advised to monitor manufacturers' autumn policy updates closely and schedule their purchasing based on actual needs, avoiding blind stockpiling. In the medium to long term, there is inelastic demand to fertilizer to autumn-sown wheat; as the stocking window narrows, supplies secured through earlier advance orders will begin to flow downstream, likely boosting market activity regarding compound fertilizer supply and demand. (Source: China Agricultural Means Media)