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Will fertilizer prices soar? I can’t do it! Author/Source: China Fertilizer Network Date: 2020-02-25 Clicks: 69 Urea prices rose hesitantly but still increased; phosphate-based fertilizers saw a clear rise in price as well. Even potassium fertilizers experienced some changes in certain areas... By \"changes\", it means that the market situation for potassium fertilizers was not favorable to begin with, and even now the author remains pessimistic about their long-term trend. Compared to the price increases of other types of fertilizers, potassium fertilizers seem to be in a situation where they simply can’t keep up. Which potassium chloride has seen a price increase? The ex-plant price of 57% powder produced by small factories in Qinghai has increased by about 50 yuan per ton compared to before the New Year (prices are given per ton, the same below). According to Zhongfei Net, at present, 57% of the powder products with a moisture content of 6% or less produced by small factories in Qinghai are being sold at prices ranging from 1,350 to 1,450 yuan per unit; before the New Year, these prices were only between 1,300 and 1,350 yuan. This increase can be seen as either a rise in prices or a return to more rational pricing. One reason for this is that there was no need for price cuts before the New Year, but some manufacturers needed funds, so they offered lower prices temporarily. Another reason is that the vast majority of factories are still in winter maintenance mode, with production resuming in March; currently, there is no pressure related to inventory levels. Meanwhile, the spring market is gradually coming online, and prices of fertilizers such as nitrogen and phosphorus are rising, which naturally leads to an increase in prices. It has been recently learned that the port prices in Bawuyuan Port in the Northeast market for 62% chalk and 60% bright red granules have just increased by about 20 yuan. This increase indicates that demand in the Northeast market is beginning to recover, and logistics are also gradually getting back on track. It may also mean that the price increases of phosphate-based fertilizers due to the impact of the pandemic are indirectly affecting other types of fertilizers as well ； In addition to the reasons mentioned above, there are also some straightforward factors: for instance, the current stock levels in regular ports are temporarily significantly lower than those in the same period last year, and the import of potassium chloride for border trade is not progressing smoothly at the moment. Which potassium sulfate has seen a price increase? The low-end prices of potassium sulfate in Mannheim have been rising successively: first in Hebei and Shandong, then in Henan and Hubei, and more recently in the Northeast. Although the increase is partial and modest, it is indeed present, with a rise of 50–100 yuan. However, with such price increases, many manufacturers still suffer losses; this is the case in Henan for example. Not to mention the abnormally low level of production there, even at normal costs, they are still over a hundred yuan higher than the current market prices in that region. Although these increases in low-end prices are becoming increasingly common, they do not indicate an improvement in the market conditions for potassium sulfate. The main reason for these increases is cost pressures, with temporary easing of supply surplus also playing a role. For example, in the Hebei region, the price of the by-product hydrochloric acid is currently more than 100 yuan lower than it was before the New Year; just this factor alone results in a higher decrease in price compared to the overall price increase. How to deal with the future market? In fact, the industry consensus is that the long-term trend for potassium chloride is downward; however, until there are concrete news regarding large-scale contracts, its price should remain relatively stable, with only minor increases possible in some areas ； It is not impossible for the market situation for potassium sulfate to improve overall, but this can only happen if the industry’s operating rate remains low for an extended period of time, until the overall inventory pressure is significantly reduced. Therefore, for the potassium fertilizer market, the best outcome this spring is likely to be **a steady performance, with the risk of a decline still needing to be monitored at all times. It is recommended that sellers not drive up prices excessively; downstream companies are advised to purchase according to their needs, and can increase purchases in the near term without the need for large-scale stockpiling of raw materials. (Adu)