This year, the supply and demand of the spring plowing potash fertilizer market is basically balanced and is tight. The industry expects that the potash fertilizer market will stabilize until the end of March, with some regions fluctuating slightly. In the medium to long term, the potash fertilizer market lacks favorable support.
First look at the supply side: At present, large potash fertilizer manufacturers are in good condition, and SMEs are relatively underdeveloped. However, last year, potash fertilizer imports exceeded 7 million tons, and the supply of spring potash fertilizer market was relatively large.
Yang Jinbang, general manager of the sales branch of Qinghai Salt Lake Industrial Co., Ltd., said that the company produced about 14,000 tons of potassium chloride per day, and the sales went up. Since the beginning of winter last year, the supply of natural gas has been tense and it has been unable to dry and pack products in a timely manner, affecting the delivery of finished products. Natural gas supply is now improving and product packaging and shipping are on the right track.
SDIC’s Lop Nur Potassium Salt Co., Ltd. in Xinjiang is also operating at full capacity during the Spring Festival. The current production conditions are good. The daily output of potassium sulfate is between 0.4 million and 0.5 million tons. Many orders are pending and the goods are taken well. Guotou Luo Kuo believes that from the overall situation of the spring potash fertilizer market, it is expected to be tightly balanced. The main reason is that the Mannheim Potassium Sulfate Enterprise is greatly affected by environmental protection factors. Many small and medium-sized manufacturers stop production or have low load production. The operating rate is only about 50%. In addition, although the production capacity of potassium sulphate in the water and salt system in the Golmud region of Qinghai Province is relatively large, it has been shut down due to weather, capital, and other factors and gradually returned to normal after March.
About half of China’s potash is imported. In 2017, 7.533 million tons of potassium chloride was imported, an increase of 10.5% year-on-year; in January this year, 946,000 tons of potassium chloride was imported, a year-on-year decrease of 2.1%. The appreciation of the renminbi now has a certain stimulating effect on imports. However, whether or not imports have increased depends on the signing of a large potash contract.
An analyst said that there is a gap in the potash fertilizer spring market. On the one hand, domestic potash fertilizer companies have a total inventory of less than 800,000 tons, and the operating rate is lower in the same period of the last four years; the supply of some potash fertilizers can be circulated less. On the other hand, small compound fertilizer companies have insufficient raw material reserves in the early stage and there is a demand for them. With the start of spring plowing, there is little room for potash fertilizer prices to rise or fall.
Look at the demand side: Now that the planting area of ​​field crops has been reduced and the area for planting of economic crops has increased, and the demand for potassium from economic crops is higher than that of field crops, so the demand for potash fertilizer in China has generally increased steadily.
Another analyst said that the current release of potash fertilizer demand is not yet obvious, but the seller said that there are few available sources of supply, no pressure, and to the peak season of spring plowing, quotations to stabilize the main; from the market mentality, years ago shouted up Quite a number of people who continue to call for a rise have now been significantly reduced. On the contrary, the number of bears is gradually increasing, especially in the downstream. It can be said that there is some lack of confidence in the medium and long-term markets.
He believes that mainly long and short sides have different judgments on the supply and demand situation. In 2017, the apparent consumption of potash fertilizer was relatively high, and the price of potash fertilizer rose to a higher level. Those who hold bearish views question the apparent supply and demand figures and believe that the amount of hidden stocks in the channel or downstream may be much larger than expected. Although the current market is small but not very much, the importer stated that the quantity of potash before the new contract is determined will be reduced, which is an uncertain factor that has not yet occurred; in addition, the price of grain is low, the planting structure is changed, and the environment is environmentally friendly. Under the influence of factors such as limited production pressure, demand may weaken.
The author believes that before the end of March, it is expected that the market for potash fertilizers will be stable, with fluctuations in some areas. In the medium and long term, there is a possibility of prices falling. The seller is advised to be cautiously optimistic and to take the lead; the dealers should purchase on demand, and the areas where logistics problems are easy to issue can be stocked earlier.