Fertilizer and pesticide stocks hit the daily limit! Listed companies respond

On February 25th, the fertilizer and pesticide sector surged again. The fertilizer and pesticide index temporarily rose over 4% during trading. Sichuan Jin Nuo’s “20CM” hit the daily limit, with Chitianhua, Yuntianhua, Liuguo Chemical, Sirt, and Jinjingda also hitting the limit.

In terms of news, prices of mainstream products such as urea, potassium sulfate compound fertilizer, and ammonium phosphate increased. Data shows that on February 24th, the market price of ammonium phosphate (55% powder) reached 3,850 yuan/ton, a year-on-year increase of 16.67%.

Latest responses from listed companies

A staff member from Jinjingda’s securities department told China Securities Journal that spring and summer are the traditional peak sales seasons for the fertilizer industry. Currently, the industry is in a seasonal prosperity cycle. From now on, roughly the next 100 days will be the industry’s peak sales period. Besides seasonal effects, recent price increases are also related to rising raw material costs. Raw materials for fertilizers mainly include phosphate rock, phosphoric acid, sulfuric acid, and urea. The company has phosphate rock but is not currently mining it. Raw materials are mainly purchased externally; if raw material prices rise, terminal product prices will also increase accordingly.

“The company’s best-selling product is conventional compound fertilizer. Additionally, sales of new fertilizers like liquid fertilizers and foliar fertilizers are also good, and phosphate fertilizers are selling well. The company has factories in Guizhou, Xinjiang, Henan, Guangdong, and Liaoning, with distributors across the country. Currently, sales are relatively strong in the eastern coastal regions. It is expected that the overall industry prosperity will see some recovery in 2026 compared to 2025,” the Jinjingda securities staff told reporters.

Another senior executive from a leading fertilizer company responded to China Securities Journal that sulfur, iron pyrite, and sulfuric acid are routine raw materials for fertilizers. Rising raw material costs do impact companies, but whether prices will increase in the future depends on terminal sales and other factors.

Performance divergence is evident

According to the 2025 performance forecasts, listed chemical companies show significant performance differentiation.

Companies with substantial positive forecasts expect product volume and prices to rise in 2025. Liming Co., Ltd. expects to achieve a net profit attributable to shareholders of the parent company of 465 million to 500 million yuan in 2025, a year-on-year increase of 471.55% to 514.57%. The main reasons for this performance change are increased sales volume and prices of main products, improved gross profit margins, and increased investment income from associated companies.

Companies with losses mainly face rising raw material costs. Liuguo Chemical expects a net loss attributable to shareholders of the parent company of 480 million to 410 million yuan in 2025. The main reason for the expected loss, as stated in their forecast, is that the company mainly purchases bulk raw materials externally, and the prices of these raw materials have significantly increased year-on-year. Phosphate rock prices remain high; international sulfur prices continue to rise, significantly increasing domestic sulfur and sulfuric acid procurement costs; potassium fertilizer purchase prices have also risen sharply, leading to a substantial increase in the cost of phosphate fertilizer products.

A research report from Guotou Securities states that the chemical industry is currently entering a phase of price increase validation. After the Spring Festival, the industry shifted from the first round of valuation recovery driven by weak reality and strong expectations to the second round of price increase implementation validation.