Global potash fertilizer market in the first quarter

In the first quarter of 2013, the international potash fertilizer market was relatively stable, but the domestic market remained sluggish. The overall demand in the domestic market did not pick up significantly and the supply continued to increase. The downturn in the previous year was intensified in the first quarter of 2013.

The contract of potash fertilizer with limited contracting effect in 2013 was earlier than in previous years. Just after the New Year holiday, Can Potex, the Canadian potash export company, first announced Sinochem Fertilizer Macao Offshore Business Services Co., Ltd., a subsidiary of Sinochem Fertilizer Holdings Co., Ltd. An agreement was reached to provide one million tons of potash fertilizer in the first half of 2013 (January to June) at a CIF price of US$400 (t price, the same below). BPC, ICL, and APC followed, and the total amount of large contracts determined in the first half of the year totaled nearly 3 million tons, which played a supporting role in supplementing the demand for the spring plough market and maintaining price stability. However, the weather this spring does not match. Affected by adverse weather conditions such as low temperatures in the northern regions and persistent droughts in the southwest, the spring cultivation and fertilizer season is delayed by about 20 days, which provides a great buffer for supplementing market sources. On the other hand, the price of the new contract was basically stable with the sales price of the port in the previous period, and there was also a lack of confidence in the downstream market for the market. As the Chinese new year approached, the wait-and-see attitude was aggravated. After the Spring Festival holiday in February, with the gradual increase in the volume of arrival, this has experienced several stable fluctuations in the price of potash after the consolidation, once again appear loose. Take the border trade quotation as an example. In early January, border trade Russian Red Potash quoted at 2,600 yuan, 62% of white potassium in the mainstream of Northeast China was quoted at 2,700 yuan, North China was 2,800 yuan, and East China was 2,850 yuan. By the end of March, the border trade Russian Red Potash quoted at 2,400 yuan. 62% of Russian white potassium dropped to 2,450 yuan.

Unbalance between supply and demand is still the main factor in suppressing price recovery. In 2012, the total supply of potash fertilizer in China was 16.62 million tons of potassium chloride, with a total demand of 12.52 million tons and a carryover stock of about 4 million tons. Ports, traders, and downstream large-scale compound fertilizer plants still have excess inventory. After entering 2013, although there were few arrivals in the sea in the first two months, the arrival of border trade continued last year's momentum and the situation was still fierce. According to customs statistics, in January and February, the amount of potash fertilizer that was transported through Russia by rail was 231,771 tons and 235,915 tons respectively. In addition, since the beginning of February, shipping contracts for the new year have arrived one after another. After entering March, the arrivals of ports and border trade increased rapidly, reaching a total of 900,000 tons, reaching the highest amount since 2008. The downstream demand has been in a tepid state. The Qinghai Salt Lake since the end of 2012, the Federal Reserve, to ensure the availability of a large number of large-scale fertilizer plant in Shandong and other places. The small and medium-sized compound fertilizer plants are more bullish on the market, and replenishment is mainly based on a small number of times. Unequal supply and demand have suppressed the recovery of potash prices to a large extent.

International market stability has limited impact on the domestic market. On the international front, following the finalization of China's large contract, on February 13th, India's 2013 potash fertilizer list was finally released, and the contract price was CIF USD 427, which was higher than China’s USD 27. It is estimated that in the first half of the year, China will have 2.7 million to 3.1 million tons of potassium chloride and India will have 1.5 to 2 million tons of cumulative cumulative imports of potassium chloride. As another major importer of potash fertilizer in Brazil, in the fourth quarter of 2012 due to the declining demand in the domestic market, buyers were mainly focused on clearing inventory, and the sharply declining import volume was released in the first quarter of 2013. According to statistics, Brazil imported a total of 780,918 tons of potash fertilizer in January-February 2013, an increase of 21.4% over the same period in 2012. The determination of the imports of major potash fertilizers in China, India and Pakistan in 2013 will further stabilize the market price of potash fertilizer in Asia and even in the first half of the year.

International suppliers are fully committed to producing guaranteed supplies in the first quarter to make up for the losses caused by production cuts in the fourth quarter of 2012. According to the latest North American data released by TFI, North American potassium chloride production in March reached 1.286 million tons, up 20% from the previous month and up 37% from the same period of last year. The export volume increased sharply. In March, the export volume of potassium chloride reached 1.286 million tons, an increase of 59% over the previous month and an increase of 183% over the same period of last year. Suppliers are still optimistic about the potash market outlook. In the first quarter, parts of Europe, the Midwestern United States and northern China were affected by low-temperature storms. The planting season lags behind, and the reduced demand will be added in the second quarter. International potash fertilizer prices are also expected to continue to increase steadily.

The domestic potash fertilizer market is worrisome in the first quarter. Sustained growth in supply and demand that has not been warmed up are two negative factors in the current market. At the FMB meeting held in Beijing at the end of April, international suppliers stated that they would raise the price of potash contracts in the second half of the year. Although it may seem premature to increase prices in terms of current market conditions, it also shows on the other hand that suppliers are trying to reverse the market situation where prices continue to decline. The recent reversal of financial speculators in the gold market by the Chinese adolescents has turned the financial sector upside down. With the recovery of the temperature and the renewed demand for crops, whether or not the potash offer is expected to stop falling and picking up remains to be tested by the market.