China's market for potassium carbonate recorded a 1% increase in price during February 2025, spurred by a combination of tightness in supply coupled with strong demand sentiments. Seasonal agricultural activities led the price movement and were supplemented by supply chain constraints driven by escalating feedstock costs.

The supply situation is tight within the potassium carbonate market during the month with no material uplifting in domestic production or inventory supplies. Potassium chloride feedstock prices kept going up, further driving cost pressures for producers. Inventories of potassium chloride at ports continued to decrease, coming down to around 2.716 million tons and weekly decreasing by 43,000 tons and year-on-year falling significantly by 1.22 million tons further straining production. To offset stock depletion, producers ramped up output and operating levels in order to supply seasonal fertilizer demand, although availability in spot markets remained confined. The market further experienced a speeding up of vendor lead times and a strategic effort to stock out running-down inventories, but logistics and cost issues hindered the overall efficiency of these actions.

On the demand side, potassium carbonate experienced a steep increase, led by seasonal agricultural activities such as spring ploughing and fertilizer production. Downstream fertilizer producers accelerated sales and raised operating levels, raising raw material procurement, including potassium carbonate. As most factories had operated on minimum raw material stocks during the early part of the year, downstream production schedules increased significantly, compelling top fertilizer firms to operate at near-capacity. This created ongoing demand for potassium carbonate, further tightening the market. Dealers also utilized an aggressive strategy of buying, in which they wished to acquire inventory at prevailing prices instead of having to pay potentially higher prices down the road. This worked to heighten a trend for higher prices as demand increased too quickly for the supply to catch up.

Other than industry sector drivers, broader macroeconomic influences also helped keep the upward push of the market for potassium carbonate intact as the manufacturing activity moved to 50.8 from January's 50.1 according to the NBS data. This was indicative of increased industrial activity and the steady coming-in of fresh orders, in turn benefiting demand for key chemical inputs like potassium carbonate. With growing industrial activities, procurement policies kept pace accordingly, further aiding price stability in commodity markets.

In the future, the prices of potassium carbonate are expected to remain on the rise in the short run. Continued supply tightness, along with continued demand from the industrial and agricultural sectors, is likely to continue to drive bullish market conditions. Production levels can rise to cover shortages, but restocking is expected to lag immediate use needs.