Will the final battle for potassium sulfate take place? _

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Will the final battle for potassium sulfate take place? _Author/Source: China Fertilizer Network Date: 2019-12-09 Clicks: 106 Is potassium sulfate a bad option? Terrible! However, no matter how bad things get, the Mannheim and water-salt system potassium sulfate \"gun\" has still not been seen – this is something that needs to be taken into account! (Note: “Gunfight” comes from battle royale games and refers to a head-on confrontation; it is used here to describe fierce price wars.) Let’s first briefly explain why the competition has not yet started. Firstly, there is intense internal strife in Mannheim, leaving the water and salt management system with little room to intervene ； Secondly, the leading manufacturer holds its prices high, while other manufacturers wait for the leader to give orders ； Third, other secondary factors such as a low operating rate and the fulfillment of tobacco orders. That's it, that's all there is to it! 　　In fact, the price of potassium sulfate in the water-salt system has dropped recently. Currently, the price of 52% powder arriving in Xinjiang is 2700 yuan per ton, while the price of 50% powder arriving in Qinghai is 2500–2550 yuan per ton. It is understood that the actual prices at which agents sell this product are lower than these official figures, but the margin of reduction is limited, being no more than a hundred yuan at most. According to Zhongfei Net, except for a few areas with high prices, the actual ex-factory price of Mannheim 50% powder in most regions is around 2,450–2,550 yuan per ton, while the price of 52% fully water-soluble powder is around 2,550–2,700 yuan per ton. In comparison, although the prices of water-salt systems have been adjusted, they are still merely following the downward trend, with no intention of using aggressive tactics to seize the market. So, will manufacturers in the water-salt industry reduce prices significantly to get involved in this competition? Will this \"final\" fierce battle in the potassium sulfate market take place? 　　Firstly, the internal strife within the Mannheim potassium sulfate market has been going on for some time now; prices have dropped by nearly 10% compared to their peak levels three months ago. However, the goal of reducing prices through promotional measures has not been achieved, as overall inventory levels continue to rise, having basically exceeded those at the end of last year. Manufacturers have realized that they should avoid reducing prices if possible, as whether or not to do so makes little difference; it’s better to hold firm! 　　Secondly, the recent decline in potassium chloride prices has slowed down; the price of 62% pure potassium at ports has yet to exceed 2,200 yuan per ton. In addition, the price of hydrochloric acid, the by-product that drives down the price of Mannheim potassium sulfate, is showing signs of weakening, with prices in some areas having dropped by around 100 yuan. This has strengthened the cost foundation for Mannheim potassium sulfate, making it less feasible to decide on price cuts easily. 　　Third, the market conditions for by-products are significantly better than in previous years; this is an important reason why, despite the recent downturn in market conditions, the operating rate of the Mannheim industry remains high. If market conditions for hydrochloric acid continue to deteriorate, coupled with environmental pressures related to winter, the operating rate of the potassium sulfate industry in Mannheim could decline significantly ； Construction activities are restricted in Qinghai region during winter, and there are reports that leading companies have plans to reduce production; as a result, the utilization rate of potassium sulfate in the water-salt industry is also on the decline. In this way, the pressure of an oversupply of potassium sulfate is expected to gradually ease. 　　From this perspective, the likelihood of a fierce competition between Mannheim and the water-salt system over potassium sulfate is low. However, this should not be interpreted as an indication that potassium sulfate prices will stabilize or even rise, as the possibility of continued steady, downward trends in its prices remains unchanged; at least in the short term, any real improvement is unlikely. It is recommended that downstream parties continue to purchase based on demand for now. Whether it’s the upstream or downstream side, those who want to take bigger risks should be cautious; it is advised to act only when it’s appropriate, and not on impulse. (Adu)