Potassium chloride invites you to \"forget all worries through drink\" – will you dare?

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Potassium chloride invites you to \"forget all worries through drink\" – will you dare? Author/Source: China Fertilizer Network Date: 2020-05-26 Clicks: 5 Recently, some traders and downstream manufacturers have said that if there is a significant adjustment in the price of potassium chloride, they are ready to buy at lower prices. For example, some traders have said that if the price of 62% pure potassium at ports falls below 1,800 yuan per ton, they will increase their purchases. One factory stated that it would be willing to purchase 62% pure potassium at 1,550 yuan per ton if such prices are available for cross-border trade... Indeed, the decline in the price of potassium chloride seems like a way to relieve various troubles, but Adu advises everyone to avoid making impulsive decisions! 　　To date, apart from RusPotash, our country has signed new large-scale import contracts with almost all the major producers. Some people are still concerned about the initial claim that \"the potassium fertilizer contract between China and Belarus does not reflect the true state of the market,\" as well as the recent statement that \"our contract with India reflects the current market situation and represents equal cooperation.\" RusPotash’s remarks seem a bit misleading, aiming to convey the idea that there could still be changes in the market for such large-scale contracts. But the trading price of potassium chloride in small-scale trade along the China-Russia border is only 200 dollars, while the domestic sales prices are already lower than this amount from the start. It’s not hard to understand what this implies, right? 　　As for variables, there indeed are some, but they exist on both sides. The pandemic is still raging. The latest figures show that the number of confirmed cases in Russia is increasing by nearly 10,000 per day, with the total number exceeding 340,000, making it the third country most affected worldwide. In Canada, the total number of cases has surpassed 80,000, placing it in 13th place globally. There are concerns that if these manufacturers experience disruptions in production or logistics due to the pandemic, it could lead to serious problems in the supply of potassium chloride, which would represent a major blow to countries that rely heavily on imports for this substance. But in Brazil, the number of cases is increasing by nearly 20,000 per day, with the total number exceeding 360,000 – making it the second highest in the world. In India, the number of cases is rising by 4,000 to 5,000 per day, with a total of nearly 140,000 cases, placing it in tenth place globally. Brazil, China, and India are the three largest importers of potassium chloride worldwide; aren’t you concerned about potential problems with demand, which could cause even greater harm to producers? 　　Some in the industry also say that current potassium chloride prices are at historic lows over the past decade or so. Among the three elements nitrogen, phosphorus, and potassium, potassium’s price is also low; therefore, there is little room for further declines. Once prices rise, the extent of the rebound will be much greater than the cost of stockpiling at those low prices earlier on. It should be noted that while large contracts were signed in our country, the CIF price of large-grained potassium chloride from Brazil rose by 5 dollars; meanwhile, the CIF price of potassium chloride in the Southeast Asian market continued to fall by 5 dollars. Why? Due to low crude oil prices and consequently low palm oil prices, demand for potassium chloride in Southeast Asia, as well as its price tolerance, are not satisfactory. Similarly, due to issues such as a sluggish economy and the depreciation of the local currency, the demand and price tolerance of many ** are not ideal. In addition to that, there are also abnormal climate factors... Will demand really improve to the point of causing a retaliatory rebound? Even if there are, how long will it take before they appear? One month, two months, three months, or six months? 　　So, just like in the domestic market situation, although there are both positive and negative factors, at least for now we can only focus on, or pay more attention to, the various possibilities that are currently unfavorable. Rather than whether the price of potassium chloride will soon reach its bottom and then start to rise, what the author is more interested in knowing is whether large-scale contracts represent the bottom point. Opportunities may exist, but there’s no need to rush. Regarding the future of potassium chloride, it’s advisable to consider first the speed at which imported potassium will arrive, and second, the overall market conditions; we can discuss these aspects in more detail later. 　　(Adu)