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Living in fear for two seasons; standing out alone among a crowd of competitors. Author/Source: China Fertilizer Network. Date: 2020-07-29. Clicks: 70. Judging from the performance of various fertilizers so far this year, potassium sulfate has performed exceptionally well – it managed to get rid of its burdens in spring and continued to achieve remarkable results in summer. Looking at the current situation, with urea remaining stuck in a cycle of fluctuations, ammonium nitrate and potassium chloride failing to see price increases, and compound fertilizers not yet achieving success, doesn’t potassium sulfate seem to stand out as the clear leader? High production rates and low inventory levels: According to preliminary statistics from Zhongfei Net, the actual production of potassium sulfate in Mannheim during the first half of the year was around 900,000 tons, an increase of about 10% compared to the same period last year ； In the first half of the year, the actual production volume of potassium sulfate in the water-salt system was around 1.1–1.2 million tons, with little variation. Overall, potassium sulfate production increased on a year-on-year basis, while at the same time inventory levels dropped to very low levels, which is a sign of a favorable market situation. Supply has increased, but prices have improved even more. Setting aside factors related to demand for now, there is actually a secret behind this seemingly similar level of operational capacity. First, Mannheim’s production rate started low before rising; it (was forced) to use historically low production levels in order to get rid of inventory buildup before the season began, and then it increased production further as demand grew ； Secondly, while Manheim was on the \"offensive,\" the potash and salt sector took appropriate \"defensive\" actions. Since potash production entered its summer maintenance period ahead of schedule, and this period was scheduled to last until May, it not only allowed the long-standing inventory problems to be resolved but also relieved pressure across the entire potash sulfate market. High profit margins and low risk. At present, the gross profit margin for potassium sulfate produced in Mannheim is quite high; to be precise—well, I won’t try to create tension among the manufacturers, but it’s simply excellent! That’s it, and it’s still rising! It is understood that at present, potassium sulfate manufacturers in Shandong, Hebei, and the Northeast region are either using more of their production for internal use, having an increasing number of export orders, or having ample stock ready for sale. Some are also about to undergo maintenance work. In any case, spot supplies are already very scarce before the end of August, and prices have risen by nearly 100 yuan in recent weeks. Starting from July 20, Luoyang Potash also announced a price increase of 50 yuan per ton, and manufacturers in Qinghai are also considering similar actions. High margins, low inventory levels, and full order schedules – what more do potash manufacturers have to worry about? High praise, low recommendations. High praise is high praise indeed, but the author has always been cautious regarding the handling of potassium sulfate. On this topic, previous articles have only touched upon it briefly; this time we’ll talk about it in more detail. It’s good that the price of potassium sulfate is high, but the industry remains cautious about it (after all, the overall environment isn’t favorable; it’s hard to stay at the top, right?) With the declining demand for water-soluble fertilizers and the sluggish performance of compound fertilizers in autumn, although order schedules are now set for a month from now, how long can the tight supply and limited availability of products, driven by high production rates, continue? Although these factors are primarily of a psychological nature, they are bound to restrict the upward trend of potassium sulfate prices. Therefore, the ‘benefits’ in the potassium sulfate market go to the manufacturers, while the risks fall on those in the mid- and lower stages of the supply chain. Especially for intermediaries, it is still recommended to focus on back-to-back or short-term transactions for now. (Adu)