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Potassium chloride is once again used in operating rooms for emergency treatment. Author/Source: China Fertilizer Network. Date: 2019-08-12. Clicks: 30. Well, the title might sound a bit scary this time, but it actually refers to something positive. In this market, it’s rare to see something good, so let’s get straight to the point! It is well known that the current potassium chloride market is under pressure from three major factors: a large inventory in ports, weak demand, and falling international prices. As the author mentioned earlier, regardless of anything, the main issue in the market now and for a long time to come is an oversupply, so the long-term outlook for potassium chloride is not very positive. But precisely because things are already like this regardless, the sellers realize that reducing prices isn’t very effective; as a result, the decline in potassium chloride prices has been quite moderate recently. After all, the price has already dropped below the cost level, which is really painful; especially when you look up and see, “Damn!” There are still over 3 million tons left! ”So the seller is certainly not satisfied with just a slow decline in prices; they also need to make efforts to push prices up from time to time. If there’s a chance, one must go; if there’s no chance, one must create one to go! Not long ago, the prices of several major commodities rose suddenly for no apparent reason; this could be seen as a test move. Although those price increases soon dropped again, they managed to introduce a small \"virus\" into the generally bearish market sentiment, causing industry insiders to pay attention not only to declines. Recently, the focus of the market has remained on the port markets where ships arrive. Yet at this time, potassium chloride has once again been put under emergency treatment; will potassium chloride be able to see price increases this time? One of the means is the exchange rate. Due to the depreciation of the RMB, which has quickly dropped below 7, some people are speculating that the cost of imported potassium chloride will rise. Of course, those who are familiar with this matter will simply laugh at such claims ； There are also objective opinions suggesting that although depreciation increases the urgency and likelihood for our negotiators to lower the prices of large contracts, which seems to put further pressure on potassium chloride prices to fall, on the other hand it actually reduces the impact of lower contract prices on cost reductions. In other words, even though the prices of large contracts drop, our costs don’t decrease much; we’re still under considerable pressure, as we have little room for further price cuts! The second method is storing in Hong Kong. Yes, the author has not written incorrectly, and readers have not seen anything wrong either – it is indeed Hong Kong storage, and this is also the main method used in this \"emergency rescue\". I’m not sure where the notion of “stability” and “apparent stability with underlying declines” mentioned by many analysts comes from; I’ve encountered price increases on numerous occasions recently, and the reason given for these increases is always the same: there isn’t enough stock available. This is no joke. According to these sellers, although the total amount of pigment in stock is very large, the majority of it consists of 60% red pigment, which the market actually does not need that much of. In addition, pigments such as Degar white, which has a limited user base, and large red particles, for which demand is currently low, also account for a certain proportion. On the other hand, the traditionally sought-after traditional white pigment and white crystal are no longer in large quantities available. In other words: you see, although we have a lot of stock, the type you want is running low. I’m sorry, but we need to keep some aside for our regular customers. So if you want it, we’ll have to raise the price! The author recalls having written an article last May titled \"The rise in potassium chloride prices is a conspiracy; it doesn’t matter whether you yield or not.\" In the current situation, although sellers don’t have that much power, these two tactics do require attention from downstream users, even though there is some exaggeration in them (supply in the first half of the year already accounted for 70% of last year’s apparent consumption, shipments continue to arrive at ports, yet there is still no sign of improvement in demand) ； Domestic potassium production has declined, but there are still inventories in the downstream market, making it difficult for prices to rise ； As international prices decline, the current drop has a greater impact on large contracts than currency fluctuations do. In summary, downstream parties with immediate demand must indeed pay attention to the seller’s willingness to maintain high prices. To avoid being affected by price fluctuations, it is necessary to keep a close eye on market changes and be ready to increase purchases at any time ； Small and medium-sized traders with empty hands, as well as downstream parties that have no demand in the short term, are better off adopting a cautious approach. It’s not impossible to bet on price increases, but it seems that the right time has not yet arrived. In fact, \"delaying\" is the ultimate measure to which sellers are forced to resort; the future of the potassium chloride market remains uncertain ； In the even longer term, it is hoped that those in positions of authority can take this opportunity to adjust strategies such as reserve levels and ordering methods, so as to ensure an adequate supply of potash fertilizer and promote the healthy development of the industry; those who have the ability to do so should make every effort to achieve this. (Adu)