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Will potassium fertilizer prices rise? Insights on Import and Export Data Author/Source: China Fertilizer Network Date: 2020-07-02 Clicks: 8 Recently, the prices of potash fertilizers have shown some volatility: first, the price of potassium chloride stabilized after reaching a bottom level, then the prices of potassium sulfate at lower levels saw a slight increase. Recently, there are rumors that new prices for domestically produced potash in July could once again bring an \"unexpected surprise\" to everyone. Will potassium fertilizers really see price increases? Let’s look for clues in the import and export data. The latest customs data show that imports of potassium chloride from January to May 2020 amounted to about 3.31 million tons, which is 1.52 million tons less than the 4.83 million tons recorded in the same period last year, representing a decrease of around 31% ； This represents a decrease of 510,000 tons compared to the average of 3.82 million tons in the same period over the previous five years, an amount corresponding to about 13%. However, about 670,000 tons were imported through border trade, an increase of 230,000 tons compared to 440,000 tons in the same period last year, representing a growth rate of around 52% ； This represents an increase of 50,000 tons compared to the average of 620,000 tons for the same period in the previous five years, which is about an 8% increase. It has been two months since April 30th, when we signed a new major maritime import contract with Belarus, but so far the volume of imports seems rather modest. On the one hand, this is related to international prices being at historic lows, while the prices of large-scale contracts in our country still remain relatively low. Recently, the main flow of potassium chloride trade internationally has been in regions with high prices; for example, Brazil’s imports in May were around 760,000 tons, and imports in June are expected to be at least 720,000 tons as well. On the other hand, China has a large stock of potassium chloride in its ports, which also makes it unsuitable to import large quantities immediately. However, although the decline in the inventory of potassium chloride at ports is not rapid, it continues to decrease. Moreover, with appropriate purchasing and stock replenishment by downstream users, some importers have indicated that supplies of traditional white potassium, which is in relatively high demand, are becoming somewhat tight. According to Zhongfei Net, at present, the price of 62% white potassium at ports remains stable at around 1,800 yuan per ton, and this has persisted for about half a month. The industry generally agrees that the price of potassium chloride has reached its bottom ； Rumors suggest that the payment situation for domestic potassium has also improved recently; prices in July might see a slight increase or at least remain stable. If this is indeed the case, how will market sentiment change after two months of expecting prices to fall without such a decline occurring? Customs data show that exports of potassium sulfate from January to May 2020 amounted to about 150,000 tons, remaining roughly the same as in the same period last year. Of this, exports in May amounted to 27,700 tons, representing a year-on-year increase of around 10% ； The export price per ton in May was around $400, which is roughly on par with the prevailing prices in the Mannheim market surrounding the port during the same period. Although the export volume of potassium sulfate has not increased significantly, it remains relatively stable. Recently, it has been learned from some manufacturers in regions such as the Northeast, Hebei, and Shandong that export orders for potassium sulfate continue to arrive, and the export prices remain relatively close to domestic market prices. This is one of the key factors contributing to the low competitive pressure in the current market. Overall, the market for potassium sulfate is favorable; the industry’s operating rate is high while inventory levels are low. Supply is somewhat tight at some manufacturers, and after potassium chloride prices stabilized at their lowest levels, some manufacturers have begun to reduce the discounts they offer. One has stabilized at the bottom, while the other has seen a slight rise from that level – is potassium fertilizer really going to see price increases? It can be said that, whether viewed from the perspective of the industry itself or the broader external fertilizer market, potash prices are indeed on the verge of rising, waiting only for the right moment. However, with the pandemic still raging around the world, it is difficult to predict how supply and demand conditions will evolve. After all, the positive factors mentioned above represent only one aspect of the market situation, and they pertain to the past. It is expected that the stable price levels for potash fertilizers will continue for some time, so it is still recommended that industry players maintain a cautious approach in their operations. (Adu)