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Nitrogen and phosphorus levels are still rising, but what about potassium fertilizers? Author/Source: China Fertilizer Network Date: 2020-11-17 Clicks: 4 What’s the problem? Potassium chloride and potassium sulfate are both still rising in price! At the beginning of November, after another round of collective price increases for potassium chloride, prices in various regions and for different grades generally reached their respective levels. Faced with potassium chloride prices that were already at high levels, downstream buyers hesitated for a while, and there were voices in the market suggesting that the price increases might have come to an end. Yet within just a few days, potassium chloride once again proved itself to the entire fertilizer market: coming together does not mean reaching an end, but rather marking the beginning of something new. According to Zhongfei Net, currently the mainstream price for 62% potassium dolomite at ports is 2,150 yuan per ton (the same unit is used throughout), and deals have already been made; moreover, the volume of transactions is on the rise. At such a price, it has once again pulled ahead of other varieties, indicating that the strategy of using white powder as a driving force for price increases, with other products following suit, continues. Meanwhile, the border trade market, after reporting a price of 62% powder at 1,800 yuan per carton in Manzhouli for a few days, declared that all stock had been sold and fell back into complete silence; the atmosphere was somewhat oppressive, causing distress among both those who were optimistic and those who were not. There are several reasons why imported potassium remains strong and continues to rise in price. Firstly, there is a shortage of domestic potassium supplies. Although large manufacturers claim that their annual production remains roughly the same as last year, it is the smaller manufacturers whose reduced production levels are likely to have little impact on the overall national production of potassium chloride in 2020. However, sales are strong, and currently there is very little inventory available in Qinghai – a situation that is rare in history. Additionally, the usual shutdown period in Qinghai that occurs during winter, coupled with rumors that even large manufacturers will cease production or at least reduce it more significantly than before, are contributing to the difficulty in securing supplies for distributors. As a result, many of them have temporarily stopped selling, which is putting pressure on downstream users who are trying every means possible to find sources of supply. It can be said that the initial reluctance to sell and price increases for imported potassium contributed to the better sales of domestic potassium, while the shortage of domestic potassium supply will in turn drive up the prices of imported potassium further. Secondly, the old major contract will expire, and a new one seems unlikely in the near future. So far, prices of potassium chloride in the international market have not seen any significant increases, and this might serve to cool down the currently overheated upward trend in domestic prices. But then I thought that, just as imported potassium and domestic potassium complement each other, although it seems unlikely for foreigners to use other markets to drive up the prices of China’s large-scale contracts in the short term, could they still strive to increase the prices of these contracts in China in order to raise prices in the rest of the global market? It seems that new large-scale contracts for potassium chloride will be negotiated in 2021! Delegates, go for it! Go ahead! Go ahead! Finally, rising grain prices, soaring fertilizer costs, and increasing prices for raw materials… all these price increases around us keep straining the industry; pessimistic attitudes are dispelled, and whether optimistic or not, people end up joining the race to drive up prices, either willingly or unwillingly. However, there is no determination to risk everything in the attempt – everyone just hopes to avoid suffering too great a loss. Among the price comparisons of major raw materials, potassium chloride, which was the first to see an increase but remains at a relatively low level, certainly cannot fall behind at this time. Not only potassium chloride, but the price of potassium sulfate has also risen for half a month, showing signs of breaking free from the constraints of the off-season. It is understood that currently, there is a shortage of potassium sulfate supply in the water-salt industry. Xinjiang Guotou Luoke underwent a lengthy summer maintenance period, and recently it won a bid to supply 180,000 tons of potassium sulfate for Yunnan’s tobacco industry. Due to this shortage, prices have risen several times already. Qinghai CITIC Guoan has also completed its annual production target and has ceased operations; as a result, the agents of these two companies have limited quantities of product available for sale on the market. The prices for their high-quality 52% and 50% purity powders have risen to 2,650 yuan and 2,550 yuan respectively. Meanwhile, the prices of potassium sulfate in Manheim across various regions have also increased by 50–100 yuan. Although orders placed at lower prices earlier are still being fulfilled for now, the lack of inventory, delays in shipment, weak competition, and rising costs mean that although the profit margin may not have increased much, prices are indeed on the rise. Currently, positive factors dominate the potassium fertilizer market, with no obvious negative factors at present. By conducting vertical and horizontal comparisons, the author makes a preliminary forecast for the future trend of potassium fertilizers (the detailed process is omitted; members can call for further details): it is expected that the price of 62% anhydrous potassium chloride at ports in the first half of 2021 will be in the range of 2,000–2,300 yuan, while the mainstream ex-factory price of 50% Munkheim potassium chloride nationwide will be in the range of 2,500–2,800 yuan. (Adu)