Potassium hydroxide

Recent Market Dynamics Intelligence for Potassium Hydroxide

I. Price Trends
- **Benchmark Price**: As of July 7, 2026, the Business Network’s (Shengyishe) benchmark price for potassium hydroxide stands at RMB 6,860.00 per metric ton, remaining stable for multiple consecutive days.
- **Regional Quotations**:
- **Shandong Province**: Jinan Jinrihe Chemical quotes RMB 6,750–6,950/ton for 90% purity potassium hydroxide; Sichuan Huarong brand is priced at RMB 8,300/ton; Shandong Jiachang Chemical’s Qinghai Yanhua brand is quoted at RMB 6,800/ton.
- **Qinghai Province**: Shandong Beilu Hengsheng Chemical quotes RMB 7,300/ton; Changzhou Aozun Composite New Materials quotes RMB 6,100/ton.
- **Hubei Province**: Xiangyang You Deshi Chemical’s Sichuan Huarong brand is quoted at RMB 8,200/ton; Korean Ulead brand reaches RMB 9,200/ton.
- **Jiangsu Province**: Suzhou Senfeida Chemical quotes RMB 8,000/ton for 95% purity potassium hydroxide.
- **Guangdong Province**: Guangzhou Tianyue Chemical’s Jiangsu Ulead brand is quoted at RMB 7,100–7,200/ton.

II. Supply-Demand Landscape
- **Supply Side**:
- Industry operating rates have declined, with inventory overstocking becoming pronounced. In June 2025, the industry’s operating rate dropped by 12.58 percentage points year-on-year to 59.78%, while inventory volume increased by 33.74% to 29,000 metric tons.
- Clean production policies are accelerating the phase-out of outdated capacity; however, the release of high-end capacity has lagged, resulting in supply-demand mismatch.
- **Demand Side**:
- Traditional sector demand remains weak: demand from chemical and light industrial sectors has notably contracted amid global economic slowdown.
- Emerging sector growth is limited: although demand from new energy, pharmaceuticals, and other emerging fields is growing, it has not fully offset the shortfall from traditional sectors. Import and export data show contraction—imports declined by 74.31% year-on-year and exports by 23.48% during January–May 2025.

III. Cost Structure
- **Raw Material Costs**: Potassium chloride prices surged 28% year-on-year; domestic 60% potassium chloride prices exceeded RMB 3,000/ton, while imported 62% Russian/Belarusian potassium chloride port prices ranged from RMB 3,250–3,600/ton—accounting for over 50% of potassium hydroxide production costs.
- **Power Costs**: Falling coal prices have eased electricity cost pressures; however, the electricity price advantage in Northwest China continues to underpin the industry’s overall cost curve.

IV. Policy Impacts
- **Clean Production Policies**: Strict enforcement of the ‘Evaluation Index System for Clean Production in the Potassium Hydroxide Industry’ mandates that enterprises maintain comprehensive energy consumption below 1.2 tons of standard coal per ton of product, driving the industry toward high-end, green transformation.
- **Technology Upgrade Pressures**: Retrofitting production lines for electronic-grade products and constructing photovoltaic-hydrogen coupling systems require substantial capital investment, posing financing difficulties and high technical barriers for small and medium-sized enterprises (SMEs).

Analysis and Outlook

I. Price Trend Forecast
- **Short-Term Stability**: The benchmark price has remained unchanged at RMB 6,860/ton for several days; regional price variations stem primarily from brand reputation, purity grade, and transportation costs—with no significant volatility expected in the near term.
- **Cost Support**: Elevated potassium chloride prices provide strong cost support; although power costs have eased somewhat, the electricity price advantage in Northwest China remains a key structural support factor.
- **Supply-Demand Balancing Act**: Inventory overstocking on the supply side and sluggish demand on the demand side offset each other; however, clean production policies constrain the reactivation of outdated capacity, limiting downward price pressure.

II. Market Contradictions
- **Structural Imbalance**: Concurrent weakness in traditional sectors and insufficient growth in emerging sectors result in persistent supply-demand mismatches, making short-term resolution of inventory overstocking challenging.
- **Policy-Driven Transformation**: Clean production policies are accelerating industry consolidation; leading enterprises are pursuing breakthroughs through technological upgrades and international expansion, whereas SMEs face mounting survival pressure.

III. Regional Disparities
- **Price Divergence**: Shandong Province exhibits wide quotation ranges (RMB 6,100–8,300/ton), reflecting differences in brand, purity, and logistics costs; higher prices in Qinghai and Hubei provinces for premium brands reflect distinct regional market positioning.
- **Production Capacity Distribution**: Northwest China—leveraging low electricity tariffs and resource endowments—has become the primary hub for production capacity; meanwhile, eastern regions focus on high-end product manufacturing and R&D.

Forward-Looking Projections

I. Price Trends
- **Short-Term (1–3 months)**: Benchmark price expected to remain stable, with regional quotations subject to minor fluctuations driven by localized supply-demand dynamics; cost-side support remains robust.
- **Medium-Term (6–12 months)**: Prices may experience modest upward movement if demand from emerging sectors accelerates significantly or policy tightening further constrains supply; otherwise, prices will likely remain range-bound.
- **Long-Term (1–3 years)**: Industry concentration is projected to increase, with higher shares of high-end products gradually elevating the price center—but global economic volatility poses continued downside risk to demand.

II. Supply-Demand Evolution
- **Supply Side**: Ongoing implementation of clean production policies will expedite the retirement of outdated capacity, while high-end capacity gradually ramps up—optimizing the supply structure.
- **Demand Side**: Growth in new energy and pharmaceutical sectors will serve as the primary demand drivers; traditional sector demand is anticipated to stabilize, supporting moderate overall demand recovery.

III. Policy Impacts
- **Green Transition**: Clean production policies propel the industry toward low-carbon, eco-friendly development, requiring enterprises to intensify technology investments and environmental retrofitting.
- **Market Consolidation**: Policy-driven restructuring will accelerate industry consolidation; leading firms are expected to expand market share via mergers, acquisitions, and strategic reorganization, while SMEs must pursue niche differentiation strategies to secure sustainable operations.

IV. Risk Alerts
- **Raw Material Price Volatility**: Potassium chloride prices are highly sensitive to international markets; sharp increases would substantially raise production costs and compress profit margins.
- **Demand Underperformance**: Global economic deceleration or sluggish growth in emerging sectors could exacerbate supply-demand imbalances and heighten downward price risks.
- **Policy Change Risks**: Adjustments to clean production regulations, environmental standards, or related policies may materially impact enterprise operations—close monitoring of policy developments is essential.