In China, the market for Water Soluble Fertilizers (WSF) under which comes Mono-Ammonium Phosphates (MAP) continued to witness a downward trend in January 2025, as weak domestic demand and ongoing export restrictions pressured prices. Despite expectations of steady consumption of WSF for the upcoming spring application season, purchases have remained slow, and market sentiment remains bearish. Industry players attribute the trend to cautious procurement strategies, high inventory levels, and uncertainty surrounding future price stability, all of which have created a challenging business environment for WSF manufacturers.

Furthermore, no fresh export sales of WSF from China have been reported recently. This stagnation is attributed to WSF producers exercising self-discipline by not applying for any fresh export inspections, even when some still have remaining export quota allocations. As a result, WSF export activity remains at a standstill, intensifying downward price pressure in the domestic market.

Market insiders anticipate that China’s suspension of phosphate exports will persist through the first quarter of 2025. This measure is intended to safeguard domestic supply and maintain price stability ahead of the crucial spring application season. However, despite these precautions, demand within China remains sluggish. Winter reserve purchases have been slow to materialize, and NPK producers continue to face inventory pressure, leading them to adopt a hand-to-mouth procurement strategy.

Meanwhile, WSF producers have expressed concerns over the execution of previously signed export contracts. While some shipments remain on track, there are no guarantees that all agreements will be fulfilled as originally planned. Notably, in late October 2024, ETG reportedly shipped 56,000 tons of MAP from the Yangtze River for supply to Ethiopia under EABC’s tender. These contracts were understood to have been signed before China introduced its latest round of export restrictions. However, uncertainty looms over whether similar transactions will proceed soon.

The bearish market sentiment is further reflected in China's MAP production rates, which have been hovering around 49% on average. With factories operating at reduced capacity, price competitiveness remains a challenge, exacerbated by sluggish demand and limited opportunities for international sales.

As per ChemAnalyst, the WSF prices may remain weak until demand picks up for spring applications. However, any potential recovery will depend on a combination of factors, including domestic buying activity, inventory management by manufacturers, and the government’s stance on lifting or extending the export restrictions beyond Q1 2025.

For now, the Chinese WSF market remains under pressure, with prices continuing their downward trajectory. Market participants are closely monitoring developments to gauge when demand for WSF might rebound and whether producers will find relief from the current bearish trend.