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A drop of four to five hundred in just two months – what kind of fertilizer is so terrible? Author/Source: China Fertilizer Network Date: 2020-06-02 Clicks: 15 Who else could it be? Potassium chloride, of course! In late February, the prices of 60% red granules and 62% white powder at ports in the north suddenly rose. By early March, the price surge reached its peak; at that time, the price of 60% red granules at Bayuquan Port soared above 2,400 yuan per ton. However, this good trend didn’t last long – the prices, which had risen over just about a month, began to fall again, and have continued to drop ever since. During April and May, the price of 60% red granules at the port dropped from around 2,400 to around 1,900, a decrease of approximately 500 yuan ； The price of 62% white potassium at the port has dropped by about 450 yuan, from around 2250 yuan at its peak to around 1800 yuan currently ； For border trade white potassium, the price has dropped from a peak of 2,100 yuan to the current lowest level of 1,550 yuan, a decrease of around 550 yuan ； The price of domestically produced 60% potassium available in the market has dropped by nearly 300 yuan, ranging from around 2,050 yuan at its peak to 1,750–1,800 yuan currently. Overall, the price of potassium chloride dropped by as much as 20% over two months. The reason for the sharp drop is, simply put, an oversupply. Firstly, the total stock level in Hong Kong is close to 4 million tons, remaining at a historically high level. Due to the international pandemic situation, unless there are outbreaks among producers, China’s future shipments are expected to remain roughly the same ； Secondly, the overall economic environment is under severe pressure. Although industries related to agriculture are relatively secure, caution prevails in all operations within these sectors; with a mindset of preferring inaction to making mistakes, how can there be optimism regarding demand? Moreover, the off-season is still long. However, it is expected that the decline in potassium chloride prices will slow down in the future. This is because the current price is already just a few millimeters away from the lowest cost level after applying the rebates for new large-scale contracts, and such prices are at their lowest levels in over a decade, both internationally and domestically. Furthermore, in recent days, many downstream manufacturers have become eager to take advantage of the low prices of potassium chloride; especially for that type of potassium chloride used in cross-border trade, which has seen the most significant price drops. Even though the market cycle for this product lasts only once a year, some nearby factories have already made purchases. Potash from salt lakes, which was originally expected to see another significant price drop, saw its new price in June remain stable, with only a small monthly incentive added. Such an “attitude” is also interpreted by some in the industry as indicating that potassium chloride prices are likely to have bottomed out. As domestic potassium and imported potassium work together to overcome difficulties, the cautious attitude on the part of end-users is bound to fade. Once there are more large-scale transactions, sellers are likely to raise the cost price to a more reasonable level, especially since the future supply of imported potassium remains uncertain at present, which provides opportunities for speculation. But has potassium chloride truly seen the end of tough times? The author believes that if such a rebound does occur in the near future, there is no need to react immediately. Simply put, since the situation of supply exceeding demand remains unchanged, we still need to remain cautious ； However, factory customers with ongoing production needs downstream should remain cautious; they might consider making purchases in advance and in larger quantities to avoid potential shortages of goods due to price spikes, or being forced to purchase raw materials at high prices on short notice. (Adu)