In February 2025, the Water Soluble Fertilizer (WSF) market in China witnessed a surge in its prices due to the rise in the production cost of the commodity along with the increased demand from the downstream agrochemical sector in China as the spring application season arrives. Similarly, the US WSF market also witnessed a surge as the weather showcased an improvement resulting in the resumed activities in the downstream agrochemical activities.

Key Takeaways:

• The Chinese WSF market witnessed bullishness amid high production costs and a surge in demand.
• NPK inventory levels declined reflecting the increased consumption rate.
• Amid a rise in the temperature, market activities in the US resumed, uplifting the WSF market sentiments in the US.

China has continued to maintain its export restrictions on phosphate export sales which is further anticipated to continue throughout the first quarter of 2025. This step was taken to stabilize the domestic prices of WSF in China. Moreover, in the domestic WSF market, the sentiments showcased bullishness driven by a surge in the upstream Sulphur and the firm prices of phosphate rock. Furthermore, the purchasing activities experienced a significant surge in northeast China amid the ease in the NPK inventory pressure which uplifted the demand for WSF from the producers, pushing the market sentiments upwards.

As of February 20, the inventories of NPK fertilizers from 32 major producers in northern China were recorded to be 794,000 tons. This showcased a decline of 47,000 tons in comparison to the previous month and 14% lower in comparison to the previous week. This decline in the available inventory levels showcased a surge in the consumption levels of phosphate fertilizers. Hence, despite the continued export restrictions on phosphate fertilizers, the market players raised their ex-quotations to reflect the rising production cost along with the increased demand for the commodity from the downstream agrochemical sector as the market players were preparing themselves for the upcoming spring application season in China.

At the same time, the US WSF market also experienced bullishness in its trend in February 2025.  Previously, the cold weather due to the snow storms resulted in slow fieldwork activities across the US, however, later on, the demand for WSF recovered as the temperature rose. Therefore, with the better weather, a surge in the purchasing activities of MAP fertilizers was witnessed at NOLA. This resulted in increased confidence in the WSF market and the market players raised their ex-quotations showcasing the bullishness of its trend.

As per ChemAnalyst, the WSF market in China is anticipated to witness an incline in the upcoming few weeks as the market players are showcasing optimism amid the upcoming spring application season and the rising production cost of the commodity. Therefore, China is less likely to lift the export restrictions anytime soon. Similarly, the WSF market in the US is also expected to showcase bullishness in its trend due to the anticipated demand for the commodity from the downstream agrochemical sector in the US.