After the Chinese New Year holiday, the price of potassium chloride in China has surged rapidly, with increases ranging from 150 to 200 CNY per ton, and in some regions, up to 250 CNY per ton. Multiple factors such as tight supply, traders' reluctance to sell, and rising international potash prices have collectively driven this price increase.
Current Market Situation: Tight Supply and Rising Prices
Currently, the supply of potassium chloride in the Chinese market is tight. Major producers such as QingHai Salt Lake Industry Co., Ltd. have reduced production due to winter maintenance periods, leading to insufficient arrivals in various regions. Port inventories continue to decline, and the imported potash supply is highly concentrated. Some traders have stopped quoting prices or are holding back on sales, further driving up market prices. The market price for 62% white potash (crystals) has reached 2830-2850 CNY per ton, with some traders even quoting prices as high as 3000 CNY per ton.
Behind the Price Increase: Dual Drivers from International and Domestic Factors
The rise in international potash prices is one of the key reasons for the increased market sentiment in China. Reduced global production and changes in tariff policies have helped maintain high potash prices. Meanwhile, the domestic supply of potassium chloride in China remains tight. Although Qinghai Salt Lake plants are operating normally, smaller factories have generally entered their winter maintenance periods, and the slow rail transportation has exacerbated the lack of product flow in the market.
Downstream Market: Low Operating Rates in Compound Fertilizer Factories and Cautious Procurement
Despite the continuous rise in potassium chloride prices, the operating rate of downstream compound fertilizer factories remains low, and procurement of raw materials has not been active. Recent purchases have mainly been for immediate needs, with limited market activity. In addition, the market for nitrogen, phosphorus, and potassium raw materials is unstable, which has further increased companies' cautious approach to sourcing raw materials.
Policy Impact: NDRC’s Attention on the Potash Market
The National Development and Reform Commission (NDRC) recently issued a notice on ensuring the supply and price stability of fertilizers for the 2025 spring sowing season and the whole year. It mentioned plans to increase water supply for potash production, enhance rail transport coordination, and optimize the potash import channels. Although the notice has not yet presented concrete measures, the potash market has drawn attention, and future policy movements are worth keeping an eye on.
Sulfate of Potash Market: Price Increase Due to Raw Material Costs
With the rise in potassium chloride prices, the sulfate of potash market has also been affected, particularly the Mannheim sulfate of potash, which has seen significant price increases. The mainstream EXW price for Mannheim 52% granular in Hebei has reached 3400-3500 CNY per ton. As for resource-based sulfate of potash, production in Xinjiang and Qinghai remains stable, with prices holding steady for the time being.
Market Outlook: Strong Bullish Sentiment
Industry insiders are generally bullish about the outlook for the potash market. With the spring agricultural season approaching, the resumption of operations and production by downstream enterprises will gradually increase the demand for potash. However, due to tight upstream supply, downstream companies face increasing difficulties in procurement. Some factories will have to purchase at higher prices, further pushing up potassium chloride prices. High international potash prices and production cuts in major potash-producing countries are also positively impacting the Chinese potash market.
Conclusion: The Market Will Likely Stay Strong in the Short Term
Overall, the tight supply situation in the potassium chloride market is unlikely to improve in the short term, and prices are expected to remain strong. Market participants need to closely monitor the delivery situation of large traders and the potential impact of national policies on the potash market.
Attention: The above information is for commercial reference only due to the diversity of information collected, and Kelewell is not responsible for the authenticity of the data.
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