Global potash fertilizer demand shrinks and prices continue to fall

Due to the financial crisis, global potash fertilizer demand has been shrinking recently, resulting in the once strongest potash fertilizer prices continue to decline. The reporter learned from the industry yesterday that as giants such as Russian BPC and Canpotex in North America lowered their prices, the domestic potash fertilizer price was under downward pressure, and some potash fertilizer companies even started their holiday from the beginning of February. However, analysts believe that potash fertilizer prices are expected to stabilize before and after the Spring Festival, and there are still opportunities for future growth.
Prior to this, China's large-scale potash fertilizer producers with high concentration had tried to get rid of the crisis by reducing production insured prices. However, the global shrinkage in demand for potash fertilizer caused the sales of major potash fertilizer companies in the country to deteriorate once, and production cuts would not help.
However, some potash fertilizer companies even started to leave for “new year” early. An insider of the Qinghai Salt Lake Industry Group disclosed to the reporter yesterday: “Some of the company’s production lines have been on holiday from February 1 and will not resume work until February 21.”
However, he predicts that with the start of the spring market, the stock of potash fertilizer in the downstream industry will be significantly insufficient, and at that time, the price of potash fertilizer may increase.
“The price reduction of potash is expected because it is closely related to the price of agricultural products.” Xu Wenfeng, a senior fertilizer analyst at Guodu Securities, said, “After the financial crisis, the prices of agricultural products have fallen. Considering that potash is only a quality improvement for agricultural products, Without a change in output, farmers would rather not buy potash to reduce costs."
“The domestic potash fertilizer market still has opportunities.” Analysts believe that, from the internal environment, compound fertilizer plants are often produced before the peak season, and they choose to stop production to reduce storage costs in the off-season, thus forming a seasonal demand change in the potash fertilizer industry. It is not really a busy season for fertilizer use. Downstream demand is weak, and market transactions are really normal.
From an external perspective, the US$350/tonne that BPC has signed with China is only a base, which is the reserve price, and may float upward in the future. According to BPC, with the recovery of international potash fertilizer trade, the future standard potassium chloride pre-sale price in Asia will not be lower than 385 US dollars (order quantity is 25,000-30,000 tons), and large-particle potassium chloride is not less than 400 dollars. Once international prices have risen, domestic potash producers are still expected to obtain new price increases.

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