Recently, domestic potassium chloride prices have slightly fallen in some areas, like a continuous autumn drizzle, making the atmosphere in the agricultural supplies market even colder. However, in the eyes of industry insiders, this is not the most pressing issue at the moment. The real 'storm' is quietly approaching—the centralized release of state-stored fertilizers (nitrogen-phosphorus fertilizers and compound fertilizers), and the chain reactions it triggers, are pushing the potassium fertilizer market toward an unpredictable crossroads.

As the deadline for completing the release of all national reserve fertilizers by the end of March draws nearer, the market's nerves are becoming increasingly tense. According to the requirements of relevant authorities, national reserve fertilizers such as nitrogen and phosphate fertilizers, as well as compound fertilizers, must be fully released by the end of this month, which will undoubtedly add pressure to already weak downstream demand. The 'icing on the cake' effect on the demand side has left the market full of concerns about future trends. Paradoxically, some potash fertilizer companies may take this opportunity to reduce their release volumes. Behind this apparent contradiction lies the real dilemma of market circulation: the current market circulation of potash fertilizer is already tight, and even if the release is increased, it is difficult to substantially improve the supply for small enterprises and market circulation. Its only effect may be to suppress the possibility of a sharp price increase.

On the other hand, the 'counter-market rise' in the potassium sulfate market has added new variables to the complex potash fertilizer market. As the core raw material for Mannheim potassium sulfate production, the price fluctuations of potassium chloride naturally affect potassium sulfate companies. Although some companies have secured supply sources, the ongoing tension in the Middle East has driven up sulfur prices, and the sharp increase in raw material costs has forced potassium sulfate companies to raise their prices again. However, the persistently weak downstream demand makes this price increase seem somewhat 'out of tune with the market.' To balance costs with market acceptance, many companies can only maintain their prices by reducing operating rates. This 'moving forward under a heavy burden' situation also reflects the awkward position of the current potash fertilizer industry chain.

The use of fertilizers for spring plowing is gradually coming to an end. Last year’s vicious cycle of 'the more it falls, the more it is purchased; the more it is purchased, the more it falls' lingers like an inescapable shadow over some companies. Some companies that have secured spot rights for potash, whether due to financial pressure or fear of stagnant sales, choose to 'hold their positions' or even privately bet on a decline in the market, believing that potash prices will continue to fall. For a time, market sentiment wavered between waiting and panic.

But a careful examination of the market context reveals that the decline in potassium chloride is not without limits; behind it lies solid support, enough to withstand the onslaught of this 'storm'.

First of all, the tight supply in the market circulation is an important "ballast" for prices. This year's tight circulation in the potash market is similar to last year's situation. However, major traders and manufacturers have increased the proportion of direct long-term supply agreements, reducing intermediate links, which allows more profits to stay within the upstream and downstream of the industry chain. Coupled with policy guidance, the overall market sentiment remains stable and cautious. Although the sentiment of some small traders and demand companies who bought at high prices fluctuates greatly, the main players who built inventories at low levels are more stable, which has also helped the market avoid extreme panic selling.

Secondly, the low level of port inventories has built a solid safety buffer for prices. Data shows that current domestic potassium chloride port inventories remain at around 2.7 million tons, only enough to meet about two months of consumption demand, far below the internationally recognized safety stock standard of three months, and even further from the industry’s generally accepted safety threshold of 4 million tons. Although inventories are expected to rise slightly at the beginning of 2026, they will still not be out of the danger zone. Especially against the backdrop of turmoil in the Middle East, the arrival situation of potash fertilizers from countries such as Jordan and Israel is drawing close attention. Any supply fluctuations could further intensify the tight situation in the domestic market. Recently, news about Lithuania potentially opening a transit route for Belarusian potash has provided a slight expectation of relief for the market, but geopolitical uncertainties still make these expectations highly variable.

Furthermore, the strength of the international potash fertilizer market will also provide strong support for domestic prices. With an annual domestic potash fertilizer import volume of about 12 million tons, it means that over half of the pricing power is in the hands of international suppliers. Under the current international situation, the continuous rise in oil and gas prices has pushed up the transportation costs of potash fertilizer. Even if no new import contracts are signed domestically, the increase in freight costs will make it difficult for the domestic potash fertilizer price at arrival to drop significantly. As international potash fertilizer prices generally rise, newly signed domestic border trade contracts are also likely to adjust accordingly. The instinct of enterprises to pursue profits will gradually align domestic prices with the international market.

Finally, the policy-level support serves as the most solid backing for the potassium fertilizer market. As the 'grain' of grain production, the stable supply of potassium fertilizer is directly related to national food security. In recent years, with the frequent occurrence of global geopolitical conflicts, countries have increasingly emphasized food security, and domestic policy protection for potassium fertilizer has become more comprehensive. The continuous adjustment of floor prices for market support has set a clear bottom for potassium fertilizer prices and also provided the market with a reassuring guarantee.

The current local decline in domestic potassium chloride seems more like a temporary manifestation of market sentiment release. As the downward trend continues, market sentiment will gradually calm, and the extent of the decline will also gradually narrow. This seemingly fierce 'storm' may cause the market to experience some turbulence, but with multiple supports such as circulating supply, port inventories, international trends, and policy backing, the potassium fertilizer market will ultimately weather the storm and return to stability. For potassium fertilizer practitioners, rather than observing in panic, it is better to seek opportunities amid the changes; after all, risk and opportunity have always coexisted.