Thread Content
Potassium chloride and potassium sulfate have seen drops of two to three hundred; one is in a worse situation than the other! Author/Source: China Fertilizer Network Date: 2019-11-05 Clicks: 274 The new prices for China’s leading domestic producers of potassium chloride have been announced; it can be said that there has been a decrease of 20 yuan per ton, but more accurately, there has actually been an increase of 30 yuan. After a year, the leader’s pricing has finally been finalized again; previously, it relied on two different approaches: a monthly apparent price and a price that was actually used by major clients. The current new quote is 2,180 yuan per ton for potassium at the port, compared to the previous monthly quote of 2,200 yuan; the actual price applicable to major customers is 2,150 yuan. Therefore, it is more accurate to say that there has been an increase of 30 yuan. However, from the beginning of the year to now, the prices of potassium chloride and potassium sulfate have dropped by two to three hundred yuan. According to Zhongfei Net, at the beginning of the year the mainstream price for 62% white potash at ports was 2,500–2,600 yuan, with transaction prices ranging from 2,500–2,550 yuan. Currently, the mainstream price and the price used as a reference for transactions are 2,250 yuan and 2,200–2,250 yuan respectively, representing a drop of 300 yuan ； At the beginning of the year, the mainstream price for domestic 60% potassium was 2420/2370 yuan upon arrival at the destination; the reference price for agents was 2350 yuan upon arrival. Currently, the mainstream price and the reference price for agents are 2180 yuan and 2030–2050 yuan upon arrival, respectively, representing a decrease of 240–320 yuan ； At the beginning of the year, the standard factory price for Mannheim 52% fully water-soluble powder was 3050–3100 yuan; in the northern market, the transaction prices ranged from 2900–3000 yuan. Currently, the standard factory price and the reference transaction price are respectively 2900 yuan and 2700–2800 yuan, representing a decrease of 200 yuan (in some areas the actual prices are even lower, resulting in a greater decrease) ； At the beginning of the year, the price of 52% powder in the water and salt market upon arrival at the port was around 3,000 yuan; currently, it is around 2,700 yuan, representing a decrease of 300 yuan. So, does a rise of 30 yuan in the price of this key product mean that the potassium chloride market is about to emerge from its downward trend? What is the situation in the potassium sulfate market? The current negative factors in the potassium chloride market are as follows: first, there is a huge inventory in the ports, 2.27 times that of the same period last year; meanwhile, domestic potassium inventory in Qinghai has risen again, and manufacturers continue to produce in large quantities. Therefore, the supply will be ample, or even excessive, at least in the short term ； Secondly, demand is very weak – not only for potash fertilizers, but for the entire fertilizer market as a whole. It can be said that at this current stage, the demand for potash fertilizers is particularly weak ； Third, as international prices decline, the costs of new large-scale contracts are likely to fall as well; based on the declines in the spot market, this reduction could be at least 25 dollars. There were hardly any positives to report, with the exception of one case where imported potassium production was losing money; however, something positive has emerged recently. First, India has once again signed a large-scale contract ahead of our country, and the price drop was only 10 dollars, which is significantly lower than what was expected. Nevertheless, it’s likely that this is just a temporary contract, and it doesn’t carry much significance ； Secondly, the delays in large-scale contracts have led to a gradual decrease in import volumes, and the stock levels at the ports have dropped; however, the volume of goods in the free trade zones has increased, which is something that needs to be taken into account ； Third, border trade has not seen any imports for several months now, and it remains uncertain whether imports will resume in November; without the competition from goods sourced through border trade, price pressures at ports in the north will ease ； Fourth, the rising prices of domestic potassium leaders have also reduced price pressure on imported potassium, thereby providing a certain psychological boost to downstream markets ； Fifth, domestic potassium producers have gradually entered the winter shutdown and maintenance period. At first glance, the potassium chloride market is no longer shrouded in the darkness of earlier times. It may be a bit early to speak of hope, but faint signs of improvement can already be heard. There is no need to rush into winter storage operations for now, but it’s still important to stay vigilant – that moment might arrive soon! The potassium sulfate market seems to be in an even worse situation. The current negative factors are as follows: First, market demand has been weakening in the second half of the year; in particular, over the past one or two months, some manufacturers have had almost no new deals, which has led to a significant increase in overall industry inventory levels, gradually approaching the situation at the end of last year ； Secondly, the possibility of a decline in potassium chloride prices remains, and with rising prices for by-products recently, there is still room for further reductions in costs ； The price of potassium sulfate in Mannheim has now aligned with that of potassium sulfate in the water-salt system, raising the possibility of new price wars. The advantages are as follows: First, the decline in potassium chloride prices is likely to be limited; the prices of by-products are also subject to constant fluctuations. Potassium sulfate manufacturers have been on the verge of losses, and considering their inventory levels, many of them are already losing money ； Secondly, the industry’s operating rate is 10% lower than in the same periods of the previous two years, which is conducive to a possible improvement in the future. Overall, the potassium sulfate market faces relatively greater pressure than potassium chloride, as there are still no significant positive factors, and there is also a possibility of further price declines. It seems that the improvement in the potassium sulfate market will lag behind that of the potassium chloride market. (Adu)