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The price difference is nearly a thousand – what kind of fertilizer is this so potent? Author/Source: China Fertilizer Network Date: 2020-06-09 Clicks: 4 What kind of fertilizer? Potassium sulfate, that’s it! Currently, in China, the premium ex-plant price for 52% fully water-soluble powdered potassium sulfate is 3,100 yuan per ton (the same unit is used throughout), while the price for the lower-quality version is less than 2,300 yuan per ton; the maximum price difference amounts to as much as 800 yuan! How significant is this price difference in traditional fertilizers? Are those expensive potassium sulfate products sold at the rate of one ton plus one ton of ammonium chloride or sulfuric acid, or two tons plus one ton of urea, or three tons plus one ton of compound fertilizer? “To be honest, the data presented in this article is accurate and reliable; however, the language used is general, and specific manufacturer names as well as the regions where higher or lower prices are found are not mentioned. Put positively, it’s rare to find fertilizer varieties that perform well even in a sluggish market situation. Potassium sulfate has also not been doing well for some time now. I won’t reveal such details to avoid disrupting harmony. To put it bluntly, I’m too scared of offending all these experts… There is a price difference, but everyone still makes a profit. Although the difference between high and low prices seems large, there are indeed significant variations in the production costs of different manufacturers. If the price of the by-product hydrochloric acid is taken into account in the overall cost, the total cost of 50% powdered potassium sulfate is currently around 2100 yuan on average. The variation across different regions and manufacturers can range up to 400-500 yuan. Although there is a significant difference between costs and market prices, profits are still being made; taking the current market prices into account, the average gross margin is around 400 yuan. However, there are differences in prices for domestic sales and exports, as well as between large and small orders. The prices of hydrochloric acid and sulfuric acid tend to fluctuate. The key issue is that the price of potassium chloride continues to drop; some manufacturers still have stock of raw materials at high prices. Therefore, the attractive gross margins mentioned above represent levels only under ideal conditions. Seeing others making money downstream, do you want to grab a big share for yourself? Keep reading. It’s falling, but there’s no inventory available. In the previous article, I mentioned that potassium chloride’s price dropped by four to five hundred units over two months; during the same period, the price of potassium sulfate also fell significantly, by about 200 units. Why is the rate of decline for potassium sulfate much slower? Due to a relatively balanced supply and demand for potassium sulfate, although the operating rate in the Mannheim region remains high at around 70%, no region has yet faced severe inventory pressures; in fact, the term \"severe\" might even be excessive. Although sales and production are not at their peak, and prices are indeed falling, the bargaining power in the potassium sulfate market has not completely shifted to the buyers; the decline in prices is merely a symbolic reaction to the sharp drop in potassium chloride prices. With that said, can friends produce more potassium sulfate? Keep reading. It’s relatively good, but don’t relax. Many traders I’ve contacted used to deal in both potassium chloride and potassium sulfate, but now they only deal in potassium chloride. Why? Firstly, the price of potassium sulfate is after all on the decline, and this decline indicates that there are indeed some problems, such as increasing sales pressure and a high operating rate, among others ； Secondly, high profit margins mean there is ample room for prices to fall; once the overall market conditions improve, this margin can become a burden, delaying the rebound in potassium sulfate prices. So, is the market for potassium sulfate doing well? The good ones are from manufacturers, while the poor ones are from mid- and lower-tier suppliers. For the mid- and lower reaches, operations need to be carried out with caution ； It is important for manufacturers in Mannheim to plan ahead; when the weather gets hot, it’s still a good idea to carry out appropriate maintenance. (Adu)