Last spring was not a busy season, and this is not the only tragedy last year? Potassium fertilizer prices have been slowly declining since before New Year’s Day to the Spring Festival. In this spring, the spring wind can also blow potash fertilizer here? Hope! It’s better to calculate. Today, let’s calculate the potassium sulfate. Potassium sulfate can be divided into three major plates from the production process, namely, the traditional Mannheim potassium sulfate, the later dominant water-salt system potassium sulfate and the “unknown” ammonium sulfate method potassium sulfate. At present, potassium sulfate by ammonium sulfate method mainly exists in individual downstream compound fertilizer manufacturers, the quantity is not large and the content is low, so it is mainly used by the manufacturers themselves, seldom circulated in the market, so it is called “obscurity”, which is generally neglected. But for Mannheim, it may become a threat that has to be considered in the future.
The competition between Mannheim potassium sulfate and potassium sulfate in water salt system has become increasingly fierce in recent years. Because in terms of productivity, a single Mannheim or a water-salt system of potassium sulfate can almost be alone. According to the statistics of China Fertilizer Network, the apparent consumption of potassium sulfate in 2018 is about 3.6 million tons. By the end of 2018, the effective production capacity of Mannheim is about 3 million tons. The total production capacity of potassium sulfate in water-salt system is about 3.7 million tons, of which Ro-K alone accounts for nearly half of the total production capacity of water-salt system.
According to the historical data of the past three years from 2016 to 2018 of China Fertilizer Network, the apparent consumption of potassium sulphate (non-statistical ammonium sulphate method) in China is about 4.4 million tons, 4.1 million tons and 3.6 million tons, respectively. In these three years, the output of potassium sulphate in water-salt system is 2.45 million tons, 2.43 million tons and 2.31 million tons, accounting for 55-56% of the total output in that year, and the output of potassium sulphate in Mannheim is 1.95 million tons and 1.94 million tons respectively The average operating rates of 1.89 million tons and 1.95 million tons are 65%, 62% and 65% respectively according to the current year’s capacity (the capacity in 2018 is about 200,000 tons less than that in 2017).
A year ago, there was a popular saying, “Be prepared to live a hard life in 2019″. This applies equally in the fertilizer market. First, the price of grain is not ideal, the enthusiasm of planting is affected, second, the “friction” is continuing, repeatedly causing “annoyance”, third, the economic environment is not good, the funds are tightened, and policy fluctuations. So whether we continue to weaken or not, let’s first assume that consumption of potassium sulfate will stabilize at about 3.6 million tons in 2019, and then add historical experience. If potassium sulfate wants to gradually improve in 2019 and its stock can return to normal level by the end of the year, the result of “output-export volume” will be no more than 3.2 million tons.
The export volume of potassium sulfate has been only 120,000 tons in the past few years, which could reach about 200,000 tons in small packages. In 2019, the export tariff of chemical fertilizer will be fully liberalized, and how much breakthrough will be made in the export of potassium sulfate on the basis of 200,000 tons? This is a long way to go, I am afraid, because the international market is not very expected now, and the original demand capacity is not very large, coupled with the coveted International new capacity. Assuming that we seize the opportunity and work hard, we can finally export 400,000 tons, then the total output should be 3.6 million tons.
If the output of potassium sulphate is stable in 2019, the stock of potassium sulphate will reach a record level of one million tons by the end of the year; if the total output is controlled at about 3.6 million tons, then the output of potassium sulphate from Mannheim and Mannheim will be reduced to 2 million tons and 1.6 million tons, respectively, according to the proportion of the output of the above water-salt system, that is to say, the industry year of Mannheim potassium sulphate. The average start-up rate is reduced to 55% from 60-65% in the previous three years.
In fact, the above estimates are not so much “truth” as far as they are concerned. They are only pure estimates, but I believe that the author has assumed a more optimistic situation. In fact, the pressure may be greater than expected, because the export is expected, but the quantity is not very promising, because the price competition between Mannheim potassium sulfate and potassium sulfate in water salt system will be upgraded again after the decline of potassium chloride, because there are still manufacturers ready to expand production and new projects in operation.
Nevertheless, the stock of potassium sulfate carried over in 2015 is quite large, but the market in 2016 is still not very good, but at the end of the year, the stock has decreased significantly, which is due to the rise in demand caused by low prices; moreover, the above calculations seem frightening, but after all, it is assumed that the hypothesis means that the possibility of change can not be ruled out. In a word, this “calculation” is not to harm manufacturers to lose confidence and motivation, but to remind, to avoid possible risks in an impatient manner. Shortly after the beginning of 2019, the policy and strategy of this year should be carefully considered.