The ongoing international potash fertilizer price negotiations are attracting the attention of many investors. From the potash price export contracts signed by India and Russia that have already been concluded, the sharp rise in prices has already hinted at the subsequent Sino-Russian potash negotiations.
From the end of March, the international potash contract price in 2008 entered the negotiation stage one after another. Recently, the international potash giant Russia BPC has reached an agreement with India's largest importer IPL. The price of imported potash rose from 375 US dollars/ton in 2007 to 625 US$/ton in 2008, and the contract volume is 750,000 tons. The implementation period is 2008. May to March 2009.
According to past practice, India has always signed the potash contract agreement with BPC before China. The contract price signed in advance signifies a kind of innuendo to China. Since 2003, foreign parties have been demanding price increases based on the international market conditions in Southeast Asia and West Asia, making the potash import contract price in these areas a “benchmark†for Chinese potash imports.
At present, the CIF price of potassium chloride in Southeast Asia has reached 600 U.S. dollars. The average price of potassium chloride imported by China in January this year was only 311 U.S. dollars, which is much lower than in other regions. Therefore, in this year's potash fertilizer price negotiations, prices have risen unavoidably.
It is reported that international potash fertilizer production capacity is mainly concentrated in Canada and Russia. Nearly 70% of global potash fertilizer production capacity is mainly provided by companies such as Campotex and Potash. In 2007, China imported 9.413 million tons of potassium chloride, a year-on-year increase of 33.5%, accounting for 80.6% of the total amount of fertilizer imports that year. A lot of dependence on imports has led people in the industry to maintain a bullish view on domestic potash prices this year or some time in the future.
According to the analysis, with the growth of domestic crop acreage, domestic potash fertilizer demand will show rapid growth in the next few years. On the supply side, with the exception of the Qinghai Salt Lake Potash (000792) expansion project, CITIC Guoan (000839) potash project, and Xinjiang Rob Lake Potash Project, there is basically no other capacity expansion. China's potash fertilizer will still mainly rely on imports. As the current international potash fertilizer company's export prices for potash in China are lower than those for other countries, these potash fertilizer companies will continue to increase their export prices to China in the coming years.
As China's potash fertilizers rely on imports for a long period of time, foreign dependency is as high as two-thirds, and the domestic supply of potash fertilizer will continue to be tight in the future. It is expected that each major potash producer will use its resource advantage this year to increase the export price of potash fertilizer to China. Under this background, domestic manufacturers will also continue to increase the ex-factory price of potash fertilizer.
It is reported that the negotiations between China and BPC were temporarily delayed until April due to the convening of the "two sessions." According to the usual practice, China and BPC will have substantial contacts during the FMB period.
From the end of March, the international potash contract price in 2008 entered the negotiation stage one after another. Recently, the international potash giant Russia BPC has reached an agreement with India's largest importer IPL. The price of imported potash rose from 375 US dollars/ton in 2007 to 625 US$/ton in 2008, and the contract volume is 750,000 tons. The implementation period is 2008. May to March 2009.
According to past practice, India has always signed the potash contract agreement with BPC before China. The contract price signed in advance signifies a kind of innuendo to China. Since 2003, foreign parties have been demanding price increases based on the international market conditions in Southeast Asia and West Asia, making the potash import contract price in these areas a “benchmark†for Chinese potash imports.
At present, the CIF price of potassium chloride in Southeast Asia has reached 600 U.S. dollars. The average price of potassium chloride imported by China in January this year was only 311 U.S. dollars, which is much lower than in other regions. Therefore, in this year's potash fertilizer price negotiations, prices have risen unavoidably.
It is reported that international potash fertilizer production capacity is mainly concentrated in Canada and Russia. Nearly 70% of global potash fertilizer production capacity is mainly provided by companies such as Campotex and Potash. In 2007, China imported 9.413 million tons of potassium chloride, a year-on-year increase of 33.5%, accounting for 80.6% of the total amount of fertilizer imports that year. A lot of dependence on imports has led people in the industry to maintain a bullish view on domestic potash prices this year or some time in the future.
According to the analysis, with the growth of domestic crop acreage, domestic potash fertilizer demand will show rapid growth in the next few years. On the supply side, with the exception of the Qinghai Salt Lake Potash (000792) expansion project, CITIC Guoan (000839) potash project, and Xinjiang Rob Lake Potash Project, there is basically no other capacity expansion. China's potash fertilizer will still mainly rely on imports. As the current international potash fertilizer company's export prices for potash in China are lower than those for other countries, these potash fertilizer companies will continue to increase their export prices to China in the coming years.
As China's potash fertilizers rely on imports for a long period of time, foreign dependency is as high as two-thirds, and the domestic supply of potash fertilizer will continue to be tight in the future. It is expected that each major potash producer will use its resource advantage this year to increase the export price of potash fertilizer to China. Under this background, domestic manufacturers will also continue to increase the ex-factory price of potash fertilizer.
It is reported that the negotiations between China and BPC were temporarily delayed until April due to the convening of the "two sessions." According to the usual practice, China and BPC will have substantial contacts during the FMB period.
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