Fertilizer and Pesticide Stocks Surge: What Investors Need to Know About China’s Chemical Market Rally

• Fertilizer & Pesticide Index: +4.0% intraday surge
• Top Daily Limit Stocks: Chuanjinnuo (20%), Yuntianhua (10%), Liuguo Chemical (10%)
• MAP 55% Price Point: ¥3,850/ton (16.67% YoY increase)
• Peak Season Duration: 100-day spring planting window

The fertilizer and pesticide sector just had a massive day.

On February 25, the fertilizer and pesticide market in China experienced a significant rally that caught investors’ attention across the board.

Here’s what went down:

• The Fertilizer and Pesticide Index surged by more than 4% during intraday trading
• Several major stocks hit daily price limits, with some jumping 20% or more
• This wasn’t a one-off move—it’s part of a broader seasonal upswing in the agricultural chemicals sector

If you’re tracking Chinese tech and market trends, this fertilizer rally tells an interesting story about supply chains, raw material costs, and which companies are positioned to win.

Which Stocks Hit the Limit-Up and Why It Matters

When Chinese stocks hit their daily price limits (either 10% or 20%), it signals serious investor conviction.

On this particular day, the following companies all experienced limit-up moves:

• Chuanjinnuo (Chuanjinnuo 川金诺)
• Guizhou Red Star Developing (Chi Tian Hua 赤天化)
• Yunnan Yuntianhua (Yun Tian Hua 云天化)
• Anhui Liuguo Chemical (Liu Guo Hua Gong 六国化工)
• Anhui Sierte Fertilizer (Si Er Te 司尔特)
• Kingenta Ecological Engineering (Jin Zheng Da 金正大)

The catalyst?

Mainstream fertilizer products started moving higher in price.

The Numbers: Fertilizer Prices Are Rising

Real data from the market shows concrete price movements:

• Monoammonium phosphate (MAP) is a key fertilizer product that investors watch closely
• As of February 24, MAP 55% powder hit ¥3,850 RMB ($535.15 USD) per ton
• That’s a year-on-year increase of 16.67%

Other products in the rally included urea and potassium sulfate compound fertilizers, both of which are essential for agricultural production.

For investors, this matters because it directly impacts the margins of these publicly listed companies.

Seasonal Tailwinds: Spring Planting Season is Here

Here’s something most investors miss about the fertilizer industry—it’s deeply seasonal.

A representative from Kingenta Ecological Engineering (Jin Zheng Da 金正大), one of China’s leading fertilizer companies, shared critical context with the China Securities Journal (Zhong Guo Zheng Quan Bao 中国证券报):

“Spring and summer are traditional peak sales seasons for the fertilizer industry. Currently, the industry is in a seasonal upswing. From now through the next 100 days, the industry expects to remain in its peak sales period.”

Translation: This isn’t just a one-day pop.

The company is signaling that the next 3+ months are expected to see sustained elevated demand as farmers prepare for the planting season.

This seasonal pattern is predictable and, frankly, baked into analyst models—but when actual demand shows up stronger than expected, stocks move.

The Raw Material Cost Story: Why Prices Matter

The real story here is about input costs and supply chain dynamics.

Fertilizer companies don’t just wake up and raise prices arbitrarily.

Their margins depend on the cost structure of raw materials, which include:

• Phosphate rock
• Phosphoric acid
• Sulfuric acid
• Urea

Here’s the interesting part: According to Kingenta’s official statement, the company owns phosphate mines but they aren’t currently being mined.

This means they’re heavily reliant on external purchases for raw materials.

As raw material prices rise, terminal product prices have to increase accordingly—otherwise, margins get crushed.

It’s a straightforward supply chain math problem.

Product Mix: Companies Are Diversifying Beyond Commodity Fertilizers

Kingenta’s product portfolio offers insight into how the industry is evolving:

• Conventional compound fertilizers remain the best-selling product
• New types of fertilizers (like liquid fertilizers and foliar fertilizers) are showing strong sales momentum
• Phosphate fertilizers are also performing well

The company operates manufacturing facilities across multiple Chinese provinces:

• Guizhou (Guizhou 贵州)
• Xinjiang (Xinjiang 新疆)
• Henan (Henan 河南)
• Guangdong (Guangdong 广东)
• Liaoning (Liaoning 辽宁)

Sales are particularly strong in eastern coastal regions, which makes sense given population density and agricultural intensity.

Kingenta’s outlook for 2026 is optimistic: they expect overall industry prosperity to recover compared to 2025.

Raw Material Costs Remain a Wildcard

Another executive from a leading fertilizer company added important nuance to the story:

“Sulfur, pyrite, and sulfuric acid are all standard raw materials. While rising costs impact the business, whether further price hikes occur will depend on terminal sales volume and market conditions.”

Translation: Companies can raise prices, but only if demand actually shows up to support it.

If farmers and agricultural buyers push back on higher prices and reduce orders, the entire dynamic changes.

This is why the seasonal demand component matters so much—it provides cover for passing through cost increases.

The Financial Performance Story: Winners and Losers

Here’s where it gets really interesting.

According to 2025 earnings previews, the chemical sector is experiencing significant financial polarization.

Some companies are crushing it.

Others are getting battered.

The Winners: Volume + Price

Companies that achieved simultaneous increases in both volume and price during 2025 are reporting exceptional results.

Limin Group (Li Min Gu Fen 利民股份) is a prime example:

• Expected 2025 net profit attributable to shareholders: ¥465 million RMB ($64.63 million USD) to ¥500 million RMB ($69.50 million USD)
• Year-on-year growth: 471.55% to 514.57%
• Drivers of growth: Higher sales volumes, increased prices, improved gross margins, and investment income from associate companies

This is the sweet spot every manufacturing company dreams of—you’re selling more stuff at higher prices while managing costs effectively.

The Losers: Stuck With Rising Input Costs

On the flip side, companies that rely heavily on purchased raw materials are getting squeezed.

Anhui Liuguo Chemical (Liu Guo Hua Gong 六国化工) is facing headwinds:

• Expected 2025 net loss: ¥410 million RMB ($56.99 million USD) to ¥480 million RMB ($66.72 million USD)
• Core problem: Procurement costs rose significantly
• Specific pressure points:
• Phosphate rock prices remained high
• International sulfur prices continued to climb
• This drove up costs for sulfur, sulfuric acid, and potash (Jia Fei 钾肥)

When you’re buying your inputs at elevated prices but can’t fully pass those costs to customers, your P&L suffers.

The divergence between Limin (up 471-514%) and Liuguo (down hundreds of millions) tells you everything about execution, product mix, and supply chain management.

The “Validation Phase”: What Comes Next

Research analysts at SDIC Securities (Guo Tou Zheng Quan 国投证券) framed this moment in an interesting way.

The chemical industry has entered what they call the “validation phase” for price increases.

Here’s what that means:

• Phase 1 (Post-Spring Festival): Initial valuation recovery driven by optimism and weak actual data
• Phase 2 (Now): Companies need to prove that price increases actually stick in the market

In other words, companies were rallying on expectations that prices would rise.

Now investors and the market need to see whether those price increases are real, durable, and sustainable.

This is a critical moment—if companies can’t actually execute price increases and maintain volume, the rally could unwind quickly.

What This Means for Investors

The fertilizer and pesticide sector rally isn’t random noise—it’s reflecting real dynamics:

• Seasonal demand is predictable and kicking in right on schedule
• Raw material costs are rising, creating urgency to raise prices
• Company execution varies wildly—some are thriving, others are struggling
• The validation phase is just beginning, so we’ll see which companies can actually sustain higher margins

If you’re tracking Chinese agricultural chemicals or broader commodity markets, this sector is worth monitoring.

The companies that own raw materials (like Kingenta’s phosphate mines) have structural advantages.

The companies that are pure procurers and converters (like Liuguo) face margin compression unless they can pass costs forward aggressively.

Watch for earnings revisions in Q1 and Q2—that’s when you’ll see whether the price increases are real or just temporary relief.

References

• Fertilizer and Pesticide Stocks Hit Limit-Up! Listed Companies Respond – China Securities Journal
• Official Website – Kingenta Ecological Engineering Group
• Official Website – Yunnan Yuntianhua Co., Ltd.
• Official Website – Anhui Liuguo Chemical Co., Ltd.