This article was extracted from the "2019 China potassium salt (fertilizer) science and technology exchange conference and nitrate innovation technology point-to-point training meeting" topic report "Current situation and technology development direction of China potassium salt (fertilizer) industry".

Recently, potash fertilizer market at home and abroad has been depressed, prices continued to decline, the market is slack, but the domestic border trade potassium and large contract was still a hot topic. Generally, at this time period, potash fertilizer import contract negotiation become the focus of the market, this year, due to various reasons, it’s slow to move. Currently, potassium chloride negative factors dominate, and market demand is insufficient. So in the context of this depressed fertilizer market, what does potash market status depend on: the requirements, rate of operation, inventory or the raw material?

Overall operation status of China potash (fertilizer) industry

Recently, for China and the world's potash industry, there is no doubt that the most words are "supply greater than demand, downturn, wait and see, cautious" and so on. Since in May of this year, potash of the world slowed down the pace of rise, into a downward trend, the main reason is due to sufficient supply and overcapacity of international potash. Take our country as an example, at present, under out of stock of import potassium and border trade potassium, our country’s potash fertilizer’s supply was still more than needed, the price fell, really not easy.

Summary of potash fertilizer in China in 2010-2019

First of all, after more than 60 years of efforts, our potash fertilizer self-sufficiency rate reached about 50%, though this 50% self-sufficiency rate is worrying! However, 60 years of efforts have made us become "processing potash production technology and product countries, some of the technologies are already powerful".

Self-sufficiency rate of potash fertilizer in China in 2010-2019

Secondly, after more than 20 years of accumulation in overseas potash fertilizer projects in China, we have had more than 10 countries and more than 30 overseas potash fertilizer projects, some of which have been put into production and will start construction.

According to the preliminary statistics of China customs, China exported a total of 14.963 million tons of mineral fertilizers and fertilizers from January to July of 2019, up 28.2% year on year. The accumulative export volume reached $4.213 billion, up 28.8% year-on-year. In terms of fertilizer imports, China imported 951,000 tons of various minerals and chemical fertilizers in July of 2019, amounting to $299 million. The main fertilizers imported from China are potassium chloride and NPK. From January to July in 2019, China imported 7.534 million tons of minerals and chemical fertilizers, up 24.2% year-on-year. The accumulative import volume reached 2.395 billion dollars, up 44% year-on-year.

Overall, the world potash industry, potassium chloride overcapacity, potassium nitrate, potassium sulfate, potassium carbonate, soil conditioner containing potassium, water-soluble formula fertilizer containing potassium, granular potash, granular special fertilizer and other high value-added varieties of technology and products are in short supply!

China potash supply forecast 

Domestic potassium is estimated to produce 8.5 million tons in 2019. In 2019-2025, the country's production will gradually decline due to the gradual reduction of potassium resources, which is estimated to fall to about 6-7 million tons by 2025.

Import potassium predicts that China's exclusive agency model is falling apart, However, various direct import channels are under way affected by the economic situation and potash fertilizer price, and "joint negotiation" will continue to play a leading role, supporting the reasonable range of quantity and price of China's potash fertilizer imports. It is predicted that the import volume in 2019 will be about 10 million tons KCl(discount). Potash imports will continue to grow between 2020 and 2025, reaching more than 10 million tons of KCl.

Overseas potassium predicts that in countries with relatively stable policy environment, overseas potash project will start to be built in 2019 and put into production in 2021. Due to the high quality of products, it is especially suitable for the needs of fine potassium chemical enterprises such as potassium hydroxide and food-grade potassium chloride. As long as there are products, their output will be developed rapidly. In 2019, Laos was the main source of potassium chloride returned to China, about 200,000 tons. After 2025, it is predicted that more than 3 million tons of production will feed back into China.

China potash demand forecast

The only variety of potash fertilizer lacking in China is potassium chloride, about 50% of which needs to be imported. Main application flow direction: compound fertilizer, direct application, formula fertilizer, water soluble fertilizer, granular potassium fertilizer, potassium nitrate, potassium hydroxide and related potassium fine chemical products.

1) Export volume: with the zero export duty of potash fertilizer, the opportunities of flowing to the market of countries along "One Belt and One Road" will increase greatly. The export volume, especially the export volume of granular potash fertilizer and processed water-soluble potash fertilizer, will increase to about 600,000 tons.

2) Total market demand: the apparent consumption in 2019 is about 18-19 million tons of potassium chloride (discount). It will be about the same as or more than 2018. In the future, with the "zero growth" of fertilizer and the popularization of "formula fertilizer" and "organic fertilizer" in 2020, the consumption of potash fertilizer in China will tend to be stable or continue to increase slightly.

In the next five years, the apparent consumption may increase to more than 20-21 million tons of KCl. The offshore base proposal is already urgent.