March draws to a close, the market is quiet; can a rider alone outpace all others?

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March draws to a close, the market is quiet; can a rider alone outpace all others? Author/Source: China Fertilizer Network Date: 2021-03-19 Clicks: 5 Looking back to last spring, by the end of March all fertilizer prices had dropped significantly. Now that we are in the second half of March, urea prices have experienced sharp fluctuations; although it has managed to recover, its momentum is far less than before ； Ammonium phosphate manufacturers, supported by international factors and thus in a strong position, remain firm, but traders have already taken profits and withdrawn in advance ； The prices offered by those unfortunate compound fertilizer manufacturers have also increased. Many large companies have seen good sales figures, exceeding those of last year; unfortunately, these orders are mainly for purchases at low prices in the early stages, which inevitably leads to problems. It can be said that while some are still waiting for a upward trend in the spring season, the curtain on the spring market has already begun to fall; even the upward trend of potash fertilizer, which continued to rise after the New Year with signs of further increases, has actually slowed down. 　　The rise in potassium fertilizers was driven by the previous sharp increases in nitrogen and phosphorus fertilizers; so could the trend change now due to a lack of further growth in nitrogen and phosphorus? Firstly, the sharp rise in nitrogen and phosphorus prices is merely a catalyst and stimulus for the increase in potash fertilizer prices; it represents an external factor. The real driving force behind this increase lies in the uncertainty surrounding imports. More specifically, it stems from concerns about a decrease in import volumes and further rises in import prices. To date, the situation regarding large-scale contracts remains unclear, and international potash prices continue to rise. These concerns are justified, especially given the ongoing decline in stock levels of imported potash and the currently limited supply capacity of domestically produced potash ； Secondly, summer is a peak season for high-nitrogen fertilizers, and the export situation for phosphate ammonium is favorable. Even if prices of nitrogen and phosphorus may not rise much further, they are unlikely to drop sharply either. Moreover, in terms of price per unit of nutrient content, potassium chloride remains the cheapest; when looking at year-on-year increases, potassium fertilizers still lag behind. Even though the peak season has passed, potassium fertilizers remain relatively more secure options. 　　So, still bullish? Not necessarily. At the beginning of the price increase, the author predicted that potassium chloride prices would rise by about 100 to 200 yuan first; once the price of 62% purity powder at the ports reached around 2300 yuan per ton, the market would need some time to adjust. After that, it would be necessary to wait and see how the import situation developed, with a possible second round of price increases in late March or April, during which time prices might rise by another 100 to 200 yuan. The first increase of one or two hundred is a normal seasonal rise, while the second increase of one or two hundred represents the higher prices that might be seen in the short term due to international market conditions. I didn’t expect potassium chloride to see such a rapid increase in price – its price rose by two or three hundred units all at once, and it’s only mid-March yet. The market still needs time to adjust, as there is slow uptake of potassium sulfate priced higher due to forced price increases; new orders for compound fertilizers with continuously rising prices are limited, and the high prices of potassium chloride have indeed reached what can be considered the ceiling under the current short-term international market conditions. Therefore, the rise in potassium fertilizer prices has slowed down. These days, the author has once again suggested that upstream manufacturers gradually shift their focus from waiting for price increases back to normal sales. 　　In summary, this means that the potassium fertilizer market is likely to enter a period of stability; it’s possible that some of the inflated prices will drop, but there’s little chance of a significant overall decline, while prices for lower-quality products are likely to continue rising. The key for the future market lies in negotiations over large-scale contracts. If other suppliers can quickly match the price of $247 in Belarus, even if Canada is not included for now, then there is little chance of significant changes in potassium chloride prices in the short term; in fact, prices are likely to decline slightly, as it is a off-season period ； However, if the negotiation process drags on, with a significant drop in deliveries during that time and international prices continuing to rise, then only after a brief pause will the peak period for potash fertilizers truly arrive. In the end, all words boil down to one sentence: Go for the big contract! (PS: Current domestic potassium production is actually at a relatively normal level, and stock levels in the port are also around the average for recent years) ； Also, recently many people have been talking about releasing the national reserves of potassium fertilizer; I really have no idea where this idea came from. (Adu)