On this day last year, the land was barren; still, I await the spring breeze today

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On this day last year, the field was barren; yet still, I await the spring breeze. Author/Source: China Fertilizer Network Date: 2019-02-11 Clicks: 49 I really want to write something good during the festive season! Yet the good things exist only in imagination; in reality, there are always so many negative factors… As for potassium fertilizer, last spring it failed to perform well during its peak selling period, and this unfortunate situation isn’t limited to just last year Since before New Year’s Day and up to now that the Spring Festival has passed, the price of potassium fertilizers has been steadily falling. Will the spring breeze still reach the potassium fertilizer market this spring? Looking forward! Let’s do the math. Today, let’s first calculate this potassium sulfate. 　　Potassium sulfate can be divided into three main categories based on its production methods: the traditional Mannheim process for potassium sulfate, the more modern aqueous-salt process for potassium sulfate, and the less well-known ammonium sulfide process for potassium sulfate. At present, potassium sulfate produced by the ammonium sulfate method is mainly found in a few downstream compound fertilizer manufacturers; the quantity is small and the concentration is low, so it is primarily used by these manufacturers themselves and rarely appears on the market. As a result, it is considered \"unnotable\" and is generally ignored. However, for manufacturers in Mannheim, it might become a threat that they will have to take into account in the future. 　　The competition between potassium sulfate from Mannheim and that from the aqueous salt system has become increasingly fierce in recent years. In terms of production capacity, either Mannheim alone or the potash sulfate system using water and salts can handle the task on their own. According to statistics from Zhongfei Net, the apparent consumption of potassium sulfate in 2018 was around 3.6 million tons. By the end of 2018, Manheim’s effective production capacity was about 3 million tons, while the total production capacity of potassium sulfate via the water-salt process was around 3.7 million tons; among this, Luoyang Potash alone accounted for nearly half of the total production capacity of the water-salt process. 　　Based on the historical data from Zhongfei Net for the period 2016–2018, the apparent domestic consumption of potassium sulfate (excluding the sulfur ammonium method) was approximately 4.4 million tons, 4.1 million tons, and 3.6 million tons respectively ； During these three years, the production of potassium sulfate in the water-salt system was 2.45 million tons, 2.43 million tons, and 2.31 million tons respectively, accounting for roughly 55-56% of the total annual production ； The production volumes of potassium sulfate in Mannheim were 1.95 million tons, 1.94 million tons, and 1.89 million tons respectively. Based on the annual production capacity, the average operating rates were 65%, 62%, and 65% (the production capacity in 2018 was about 200,000 tons lower than that in 2017). 　　Before the New Year, there was a saying that went, “Be prepared for tough times in 2019.” The same applies to the fertilizer market. Firstly, unfavorable grain prices affect enthusiasm for cultivation; secondly, the \"frictions\" continue, causing repeated annoyance; thirdly, the economic environment is poor, with tighter funding and policy fluctuations. So, regardless of whether consumption will continue to decline or not, we assume that potassium sulfate consumption in 2019 will remain around 3.6 million tons. By drawing on historical data, if potassium sulfate consumption is to improve over time and inventory levels are to return to normal by the end of the year, then the value of \"production minus exports\" should be no more than 3.2 million tons. 　　In previous years, the volume of potassium sulfate exported in its pure form was only 10,000 to 20,000 tons; when small packages are taken into account, the total amount can reach around 200,000 tons. With the complete removal of export tariffs on fertilizers in 2019, by how much could the export volume of potassium sulfate increase from its current level of 200,000 tons? This is likely to be a long and arduous task, as the international market situation does not seem very promising at the moment; moreover, the existing demand is not very high to begin with, coupled with the competitive threat from new production capacities abroad. Assuming we seize the opportunity and work very hard, we can eventually achieve exports of 400,000 tons; in that case, the total production should be 3.6 million tons. 　　Well, if the production of potassium sulfate in 2019**, then the inventory levels of potassium sulfate by the end of the year could reach record highs, reaching the million-ton level again ； If the total production is kept at around 3.6 million tons, then, based on the proportions of output from the aforementioned water-salt systems, the production of potassium sulfate in Mannheim would need to be reduced to 2 million tons, while that of other products would have to drop to 1.6 million tons. In other words, the average annual operating rate of the potassium sulfate industry in Mannheim would need to be reduced from 60-65% in the previous three years to 55%. 　　The various calculations mentioned above actually don’t rely on much \"logic\"; they are merely pure calculations. But please be assured that the author has made assumptions based on a relatively optimistic scenario. In fact, the pressure might be even greater than expected, as demand for exports exists, but the volume of such exports is not very promising. With the decline in potassium chloride prices, price competition among potassium sulfate produced in Mannheim and that produced using the water-salt process will intensify again, as there are also manufacturers planning to expand their production capacity and new projects are in operation. However, there was also a considerable amount of potassium sulfate inventory carried over from 2015. Although the market conditions in 2016 were not particularly good, inventory levels decreased significantly by the end of the year, and it was precisely the low prices that led to an increase in demand ； Furthermore, although the various calculations mentioned above seem daunting, they are after all assumptions, and the very nature of assumptions is that they do not rule out the possibility of changes. In short, this \"calculation\" is not intended to make manufacturers lose confidence and motivation; rather, it serves as a reminder, aimed at helping them avoid potential risks promptly. 2019 has just begun; please give careful consideration to the policies and strategies for this year! 　　(Adu) Author/Source: China Fertilizer Network Date: 2019-02-11 Clicks: 49 I really want to write something good during this important holiday season! Yet the good things exist only in imagination; in reality, there are always so many negative factors… As for potassium fertilizer, last spring it failed to perform well during its peak selling period, and this unfortunate situation isn’t limited to just last year Since before New Year’s Day and up to now that the Spring Festival has passed, the price of potassium fertilizers has been steadily falling. Will the spring breeze still reach the potassium fertilizer market this spring? Looking forward! Let’s do the math. Today, let’s first calculate this potassium sulfate. 　　Potassium sulfate can be divided into three main categories based on its production methods: the traditional Mannheim process for potassium sulfate, the more modern aqueous-salt process for potassium sulfate, and the less well-known ammonium sulfide process for potassium sulfate. At present, potassium sulfate produced by the ammonium sulfate method is mainly found in a few downstream compound fertilizer manufacturers; the quantity is small and the concentration is low, so it is primarily used by these manufacturers themselves and rarely appears on the market. As a result, it is considered \"unnotable\" and is generally ignored. However, for manufacturers in Mannheim, it might become a threat that they will have to take into account in the future. 　　The competition between potassium sulfate from Mannheim and that from the aqueous salt system has become increasingly fierce in recent years. In terms of production capacity, either Mannheim alone or the potash sulfate system using water and salts can handle the task on their own. According to statistics from Zhongfei Net, the apparent consumption of potassium sulfate in 2018 was around 3.6 million tons. By the end of 2018, Manheim’s effective production capacity was about 3 million tons, while the total production capacity of potassium sulfate via the water-salt process was around 3.7 million tons; among this, Luoyang Potash alone accounted for nearly half of the total production capacity of the water-salt process. 　　Based on the historical data from Zhongfei Net for the period 2016–2018, the apparent domestic consumption of potassium sulfate (excluding the sulfur ammonium method) was approximately 4.4 million tons, 4.1 million tons, and 3.6 million tons respectively ； During these three years, the production of potassium sulfate in the water-salt system was 2.45 million tons, 2.43 million tons, and 2.31 million tons respectively, accounting for roughly 55-56% of the total annual production ； The production volumes of potassium sulfate in Mannheim were 1.95 million tons, 1.94 million tons, and 1.89 million tons respectively. Based on the annual production capacity, the average operating rates were 65%, 62%, and 65% (the production capacity in 2018 was about 200,000 tons lower than that in 2017). 　　Before the New Year, there was a saying that went, “Be prepared for tough times in 2019.” The same applies to the fertilizer market. Firstly, unfavorable grain prices affect enthusiasm for cultivation; secondly, the \"frictions\" continue, causing repeated annoyance; thirdly, the economic environment is poor, with tighter funding and policy fluctuations. So, regardless of whether consumption will continue to decline or not, we assume that potassium sulfate consumption in 2019 will remain around 3.6 million tons. By drawing on historical data, if potassium sulfate consumption is to improve over time and inventory levels are to return to normal by the end of the year, then the value of \"production minus exports\" should be no more than 3.2 million tons. 　　In previous years, the volume of potassium sulfate exported in its pure form was only 10,000 to 20,000 tons; when small packages are taken into account, the total amount can reach around 200,000 tons. With the complete removal of export tariffs on fertilizers in 2019, by how much could the export volume of potassium sulfate increase from its current level of 200,000 tons? This is likely to be a long and arduous task, as the international market situation does not seem very promising at the moment; moreover, the existing demand is not very high to begin with, coupled with the competitive threat from new production capacities abroad. Assuming we seize the opportunity and work very hard, we can eventually achieve exports of 400,000 tons; in that case, the total production should be 3.6 million tons. 　　Well, if the production of potassium sulfate in 2019**, then the inventory levels of potassium sulfate by the end of the year could reach record highs, reaching the million-ton level again ； If the total production is kept at around 3.6 million tons, then, based on the proportions of output from the aforementioned water-salt systems, the production of potassium sulfate in Mannheim would need to be reduced to 2 million tons, while that of other products would have to drop to 1.6 million tons. In other words, the average annual operating rate of the potassium sulfate industry in Mannheim would need to be reduced from 60-65% in the previous three years to 55%. 　　The various calculations mentioned above actually don’t rely on much \"logic\"; they are merely pure calculations. But please be assured that the author has made assumptions based on a relatively optimistic scenario. In fact, the pressure might be even greater than expected, as demand for exports exists, but the volume of such exports is not very promising. With the decline in potassium chloride prices, price competition among potassium sulfate produced in Mannheim and that produced using the water-salt process will intensify again, as there are also manufacturers planning to expand their production capacity and new projects are in operation. However, there was also a considerable amount of potassium sulfate inventory carried over from 2015. Although the market conditions in 2016 were not particularly good, inventory levels decreased significantly by the end of the year, and it was precisely the low prices that led to an increase in demand ； Furthermore, although the various calculations mentioned above seem daunting, they are after all assumptions, and the very nature of assumptions is that they do not rule out the possibility of changes. In short, this \"calculation\" is not intended to make manufacturers lose confidence and motivation; rather, it serves as a reminder, aimed at helping them avoid potential risks promptly. 2019 has just begun; please give careful consideration to the policies and strategies for this year! 　　(Adu)