The Price of Potassium Chloride Will Rise Sharply in 2021, With An Annual Increase of 33.80%

Since the Spring Festival in 2021, driven by the bull market of the collective rise of chemical bulk commodities, the domestic potassium chloride market has shown a trend of sharp rise in the first three quarters and wide fluctuations in the fourth quarter. After several rounds of increases in the first three quarters, the ex-factory price of potassium chloride in the domestic salt lake finally reached 3270.00 CNY/ton in August, which is the highest point of the year. However, after the state introduced the policy of ensuring supply and stabilizing prices, the price of potassium chloride began to fluctuate widely in mid-October, rising and falling at 300 CNY/ton. According to the data monitored by the business agency, the ex-factory price of potassium chloride at the beginning of the year was 2160.00 CNY/ton, and the price of potassium chloride at the end of the year was 2890.00 CNY/ton, with a total increase of 33.80% during the year. The lowest price of the whole year was in the first ten days of February, with a price of 2140.00 CNY/ton, and the highest price of the whole year was in August and September, with a price of 3270.00 CNY/ton, with a maximum amplitude of 52.80% during the year.

Judging from the port potassium chloride price statistics chart, the port potassium chloride self-delivery price in 2021 also showed a sharp rise in the first three quarters, and a narrow fluctuation trend in the fourth quarter. The price of 62% white potassium in the port reached a high of 4,300 CNY/ton during the year. From the statistics of the import and export volume of potassium chloride, as of November 2021, China imported about 7.28 million tons of potassium chloride.

Market review

In the first quarter, the potassium chloride market fell first and then rose. January continued the strong trend in December 2020. The domestic potassium chloride trading atmosphere was general, the downstream demand was insufficient, and there were not many new orders. The price of potassium chloride rose from 2160.00 CNY/ton at the beginning of the month to 2175.00 CNY/ton at the end of the month. Up 0.69%. Entering February, after the Spring Festival, the upstream and downstream enterprises of potassium chloride started construction one after another, with strong upstream support and good downstream demand. The price of potassium chloride fell from 2175.00 CNY/ton at the beginning of the month to 2155.00 CNY/ton at the end of the month, a decrease of 0.92%. In March, the price of potassium chloride rose sharply. With the preparations for spring ploughing across the country, agricultural fertilizers have entered the peak season. The salt lake potassium chloride equipment is operating normally, and the daily output has risen from 6,000-8,000 tons in early February to 11,000 tons. However, some large traders stopped selling potassium chloride and were reluctant to sell potassium chloride, resulting in poor spot liquidity and tight overall supply. The supply of individual varieties in some areas was in short supply, resulting in a large increase in the price of potassium fertilizer. The price of potassium chloride rose from 2155.00 CNY/ton at the beginning of the month to 2380.00 CNY/ton at the end of the month, an increase of 10.44%. The price of potassium chloride rose by 10.19% in the first quarter.

The potassium chloride market continued to rise in the second quarter. The price of potassium chloride continued to rise slightly in April. The price rose from 2,380 CNY/ton at the beginning of the month to 2,525.00 CNY/ton at the end of the month, an increase of 6.09%. The domestic potassium chloride plant has not been fully opened, and there are many orders to be issued, which are continuing to be shipped. The port stock of imported potassium at the port is about 2.5 million tons, but excluding the 1.5 million tons of national commercial reserves, the source of imported potassium chloride that can be sold at the port is even less than 1 million tons. The price of potassium chloride was temporarily stable in May. The time of the national potash fertilizer reserve is about to end, and the market wait-and-see atmosphere is gradually becoming stronger. In terms of port potassium, the spot circulation is poor, and most of the supply is concentrated in the hands of large traders. Into June, the price of potassium chloride continued to rise. The price of potassium chloride rose from 2525.00 CNY/ton at the beginning of the month to 2800.00 CNY/ton at the end of the month, an increase of 10.89%. The domestic potash fertilizer market is in tight supply, the supply is tight, and the price remains firm. The auction price of Salt Lake Group's products has repeatedly hit new highs. In terms of imported potassium, the port stock has continued to decline for 7 weeks, and has dropped to about 2.1 million tons. The circulation of potassium in border trade is small, and the market is hoarding goods to rise. , the transaction prices in various places are more chaotic, and most varieties have no obvious mainstream price. The price of potassium chloride rose by 17.65% in the second quarter.

In the third quarter, the potassium chloride market remained at a high level. The price of potassium chloride in July rose from 2800.00 CNY/ton at the beginning of the month to 3270.00 CNY/ton at the end of the month, an increase of 16.79%. The price of potassium chloride in August and September has been maintained at a high level of 3270 CNY/ton. In terms of domestic potassium, the Qinghai area has started normal operation, some small factories have been overhauled, the spot supply is limited, the shipment is normal, the available supply is tight, the domestic inventory is relatively low, the transaction prices in various places are relatively chaotic, and the transaction is mainly negotiated. In terms of imported potassium, affected by the rising international market and the decrease in the number of ships arriving in the market, the price rose rapidly, and the traders were reluctant to sell and wait for the price to rise. In terms of potassium chloride in border trade, the circulation of potassium chloride at border trade ports is small, and there is a phenomenon of stockpiling to be increased, and the supply of saleable goods is tight.

The potassium chloride market fluctuated widely in the fourth quarter. Potassium chloride prices fell sharply in October. The supply of chemical fertilizers was guaranteed and the price was stable, the leading domestic potassium chloride enterprises were fined, and the price of potassium chloride fell. The price fell from 3270.00 CNY/ton at the beginning of the month to 2890.00 CNY/ton at the end of the month, a decrease of 11.62%. The price of potassium chloride rose slightly in November, from 2890.00 CNY/ton at the beginning of the month to 3190.00 CNY/ton at the end of the month, an increase of 10.38%. The two major potassium chloride plants in Salt Lake and Zangge are still in operation, but the market supply continues to be tight due to various reasons such as transportation. In December, the price of potassium chloride fell to 2890.00 CNY/ton. Downstream compound fertilizer factories are slow to advance in winter storage, and their purchasing enthusiasm is not high. Market transactions of high-priced potassium chloride are limited. In the latter part of the decade, the price decline of nitrogen and phosphate fertilizers became more and more obvious, and the price of potassium chloride also began to fall. The price of potassium chloride fell by 11.62% in the fourth quarter.

The international potash fertilizer is consolidating at a high level, the downstream purchasing enthusiasm is general, and the potassium chloride market outlook is bullish

In the middle and late January, the potassium chloride market may fluctuate slightly and rise. The spot CFR price of potassium chloride in Brazil has reached $800/ton, South Africa is $770/ton, Australia is $730/ton, and Southeast Asia is $620/ton, nearly three times higher than the beginning of the year. International potassium chloride support is obvious. Belarus is under sanctions, sea transport is shut down, and other modes of transport increase costs, hinder exports and increase prices. At the same time, the rising prices of agricultural products and other commodities have stimulated farmers' enthusiasm for planting, resulting in a huge increase in the demand for potash fertilizers, which in turn has caused a situation in which the supply is in short supply. Market outlook is expected to increase domestic potassium chloride prices slightly.