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The market situation for potassium chloride may reverse; other fertilizers also deserve attention! Author/Source: China Fertilizer Network Date: 2019-11-04 Clicks: 301 In fact, the sluggishness in the winter fertilizer market has not shown any significant improvement to date; this downward trend has persisted for a long time. Excessive negative reports only serve to increase people’s fear. Therefore, today Adu would like to discuss some possible positive developments that could occur, as a reference for everyone. Large contracts from India are merely a cost-related factor for our country’s potassium chloride market; the most critical issue at present is the oversupply situation that cannot be resolved in the short term. So, if India agrees to pay a high price, let them do so – who cares? However, the author believes that the large contract in India could trigger a butterfly effect; looking back in the future, we might find that it became an important turning point in the trend of the potassium chloride market. On October 25, India signed a new large-scale contract for potassium chloride with Ural Potash Company. While people were still wondering if there was something suspicious about the high price of $280 per ton, other major suppliers such as Belarus and Israel also signed new large-scale contracts with India at the same price. I’m not advocating for the high price of $280; I’m just saying that, regardless of any possible tricks or manipulations, international suppliers at least get a chance to catch their breath. This is more meaningful and effective than news about collapses, strikes, or production cuts. To be honest, since China doesn’t sign large contracts, prices in the two major spot markets continue to fall, putting significant pressure on suppliers. Now that India has signed a contract, and at a high price no less, those foreigners will have more time and opportunities to continue ‘confronting’ China. In the spot market, although there are no signs of improvement in Brazil for now, the strong rebound in palm oil prices in Southeast Asia suggests that demand for potassium chloride and purchasing power in that region may improve in the future. By then, a major contract and a victory in an important spot market are likely to become weapons for foreign companies to defeat us; although the possibility of us signing such contracts at low prices isn’t completely gone, it has indeed decreased. Since the possibility of lower costs has diminished, this could ease the bearish sentiment in the domestic market to some extent, preventing downstream players from waiting patiently for price drops. Previously, when there were downward pressure of $30 on large contracts in India, the sellers tried their best to hold prices steady; now their confidence in doing so will also increase to some extent. Thus, there is a shift from waiting patiently for price drops in the downstream area to waiting patiently for improvements in the upstream area; this is a process that may not be short, but at least it represents a change, unlike the almost uniformly bearish outlook in the earlier period. Meanwhile, domestic potassium production has gradually entered the winter shutdown and maintenance period, and the leading producers have realized that price cuts do not have a significant effect; they are said to be planning to hold their prices and wait and see. What is it especially? Regarding the bankruptcy reorganization of the leading company, although people don’t think that any major changes will actually occur, they are still worried that problems might arise at critical moments, such as delays in shipments, which could tie up funds and slow down progress. This concern itself implies such a possibility, and once it does occur, just imagine what the situation will be like: imports of potassium will stop arriving, stock levels at ports will gradually decline, while market demand continues to rise; at the same time, there will be issues with the supply of domestically produced potassium, leading to market panic... The likelihood of large contracts being signed at low prices decreases further. Will there be a significant price rebound next spring? This possibility exists, and it really needs to be taken into account. So the current challenge in the potassium chloride market is whether demand will be unleashed during the last two months of 2019, namely November and December. If demand remains low, it is possible for prices to fall further amid the pressures of the end of the year; those so-called various possibilities might just be mere assumptions. With the overall environment being unfavorable, it is indeed difficult to get the market moving. But it isn’t the only one that is changing subtly in a manner similar to potassium chloride. Possible increases in shipping costs due to inspections for oversized loads transported by road, potential logistics shortages in the region after winter sets in, rising natural gas prices, a decline in industry operational rates, and so on – various such changes are \"latent\" in every sector related to fertilizers. In short, let’s not just sit around waiting for prices to drop any further in these last two months; the room and possibility for further price declines are gradually diminishing, and perhaps the best time is about to arrive. No matter what kind of fertilizer it is, avoid being hasty or waiting foolishly – pay more attention to it! (Adu)