Potassium Sulfate: It is expected that the temperature will rise after the Spring Festival, but it lacks strong support.

- Feb 13, 2019-

Potassium Sulfate: It is expected that the temperature will rise after the Spring Festival, but it lacks strong support.

For potassium sulphate, many manufacturers have expressed their expectations for the future market, or the New Year's wish is "not to lose". What does that mean? It can sell well; the price is not at a loss! Oh, what a simple dream!

First, the potassium sulfate Market is facing tremendous pressure. In 2017/2018, the price of winter storage rose in the off-season. In spring, it was flat and slowly turned downward. Even though it rebounded in the middle of the year, it fell into a situation of no market value. In September, it began to enter an obvious bottleneck period again. After only two months, it began a new round of decline, until now. It can be said that most of 2018 potassium sulfate sales are not ideal, and production reduction is limited, coupled with price strategy errors, so the inventory pressure reached a historical high.

According to the statistics of China Fertilizer Network, the total output of potassium sulfate in 2018 decreased by 150,000 tons (about 3%) compared with 2017, and the total carrying-over stock at the end of the year was at least about 550,000 tons. According to this calculation, the apparent consumption of potassium sulfate in 2018 decreased or reached 700,000 tons (about 16%) compared with 2017.

At the same time, the market price has approached the cost line, and some have lost money, so the industry start-up rate has been at a low level of about 50-60% for a long time. However, this rate of start-up is confronted with the realistic problems of poor demand and excessive inventory, so it can be said that it is not low. It is understood that in the past two months, while reducing the start-up rate and the price, the stock pressure of potassium sulfate is no longer increasing rapidly.

Secondly, future threats cannot be ignored. According to the monitoring data of the National Grain and Oil Information Center, as of January 13, 2019, the sales progress of Maize by farmers in Heilongjiang, Jilin, Liaoning and Inner Mongolia provinces was 44%, 23% slower than the previous year. Because of poor returns, farmers'selloff mentality is aggravated, and the northeastern production areas may still face the pressure of phased grain sales after the Spring Festival. The above is just a representative example to illustrate that demand may continue to be depressed or even further weakened. On the other hand, the price of potassium chloride has fallen back about 100 yuan, due to the demand is not strong and the volume of goods arrived in recent months is too large, and there is still a clear space from the price and cost comparison, so the price of potassium chloride should continue to fall after the festival should be a probability event. It is also known that the pressure of Mannheim potassium sulfate on environmental protection and by-products has been alleviated in recent years. So the cost of potassium sulfate support may be weakened.

Looking back, there are still a lot of Pre-Inventory waiting for digestion. Can the leader stand up to the market improvement without price reduction? Whose confidence is enough?

To sum up, the new year's wish of potassium sulfate manufacturers is rational and necessary. From an optimistic point of view, this will help the market return to normal as soon as possible. It is expected that potassium sulfate Market will gradually warm up after the Spring Festival, but there is no possibility of a good performance for the time being, so we can only get out of the haze steadily and steadily. At that time, we should not be too excited to think about the immediate price increase and increase the start-up rate, unless our stock is completely digested.