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Potash fertilizer: Prices dropped today with no reaction; will they rise even more tomorrow and become unaffordable? Author/Source: China Fertilizer Network Date: 2020-12-24 Clicks: 5 After December arrived, the aggressive potassium chloride seemed to have changed completely, becoming less intense. At the beginning of the month, domestic potassium and potassium sourced through border trade saw price increases, pushing overall potassium chloride prices to high levels. However, demand failed to keep up, and the port-based potassium, which had been leading the price increases in a relatively stable market, began to show signs of weakening. Does this mean that the four-month-long upward trend in potassium chloride prices is coming to an end? According to Zhongfei Net, the current mainstream price for 62% chalk at ports is 2,130 yuan per ton, while it was previously in the range of 2,130–2,150 yuan per ton. Such changes occur in other forms of content as well as in street markets; the magnitude may be slightly greater in some cases. However, this level has persisted throughout the month, and it is occasional rather than constant, affecting individual cases rather than the overall situation. Therefore, describing a decline in potassium chloride levels as severe seems a bit excessive; it would be more appropriate to refer to it as a \"relaxation\" in those levels. Firstly, the main reason for the slowdown is not weak demand, but rather year-end factors. The demand has never really been strong; otherwise, why would it be called \"fierce\" potassium chloride? It rose steadily all the way! But it’s the end of the year; some traders need to meet their sales targets, and others need to present a favorable financial picture, so they have to put aside their pride for now. As some people reluctantly eased their stance, others followed suit; perhaps they decided to stop when things were going well, or maybe they became a bit scared. In any case, the group of those who eased their stance gradually grew larger. Secondly, the drop over the course of a month was only minimal, and the quotes offered by most traders, especially the larger ones, remained stubbornly stable; this further indicates that weak demand is not the main factor, and the market situation is not truly in a difficult state. Third, the first quarter is the period with the lowest domestic potassium production. At present, the operating rates of small factories are gradually decreasing; it is said that salt lake companies may reduce production after mid-January and continue to do so until the end of February. They currently have low inventory levels, and their production plans for next year will be reduced as well. As a result, the supply of potassium chloride may still be \"tight\". Fourth, there is still no news regarding negotiations for new large contracts, but we can clearly see the efforts by foreign companies to drive up prices. Although we are confident in our own strengths, the efforts of foreign parties cannot be ignored either; it means that negotiations for new large-scale contracts are likely to turn into another round of back-and-forth struggles. In summary, the upward trend of potassium chloride prices seems not to have ended yet. The author expects that sellers will drive prices up again in January: Salt Lake Company is likely to raise its prices slightly, as there isn’t much goods available for sale ； The Port Trade Fair once again raised prices and held back from selling, waiting for the right moment to increase prices further. So, based on such expectations, does it mean that if prices fall today and people ignore them, they will rise even further tomorrow and become unaffordable? It won’t be that bad! As mentioned above, demand has not kept up. Firstly, many downstream users have already made purchases at low prices, so there is no urgency to replenish stock at the moment. Secondly, whether it’s potash fertilizer or other raw material fertilizers, the industry believes that their prices are already at relatively high levels; the risks associated with purchasing more of these products may outweigh the potential profits ； Furthermore, before stating that the efforts of foreign parties cannot be ignored, the author mentioned that we have confidence in our own advantages; this confidence stems from the still substantial stock levels in Hong Kong, from the relatively high levels of inventory in society, and also from the favorable situation we enjoy amid the international pandemic situation. So, demand in the future is likely to not be particularly strong either (except perhaps for big red particles?) ), the risk of supply disruptions is also not high; the price increase in January is likely more aimed at achieving stability through higher prices. Taking all of the above into account, it is recommended that downstream parties continue to make purchases based on actual needs; those with low inventory of raw materials can take this opportunity to restock. (Adu)