Global demand for fertilizers enters a period of calm

Alexander A. Paulov, chairman of Russia’s Acron Group, recently stated that the recent increase in global fertilizer demand has only risen by 0.5%, which is far below expectations. The increase is mainly driven by the Chinese market, and the export volume of urea and phosphate fertilizers is relatively large. He said that in the future, the demand for global fertilizer will no longer fluctuate significantly, and it has entered a relatively stable period of stability. From the export prices in recent years, it can be seen that the global demand for nitrogen, phosphorus, and potassium no longer soars, especially nitrogen fertilizers and phosphate fertilizers, and there has been a surplus. The IFA predicts that the phosphorus consumption market will rebound significantly in 2015, rising from -1.3% last year to 0.6%, and the main area for consumer recovery is in India. As one of the largest fertilizer importing countries in the world, India's phosphate fertilizer and potash fertilizer production capacity are at a relatively low level in the world. However, the international nitrogen fertilizer market will remain flat, maintaining a growth rate of 1.3% last year. The stability of nitrogen fertilizer prices is conducive to the protection of the stable export prices of nitrogen-producing countries. It is also conducive to eliminating backward production capacity, reducing the proportion of coal-based urea, and protecting the environment and energy.

Recently, the international potash fertilizer market prices have risen and fell. The price increase areas are concentrated in the European market. Since the second quarter, the price of potassium chloride has increased by an average of 7-12 Euro/ton. The falling prices are mainly concentrated in Brazil and Latin America. It is reported that the turnover of new orders in Brazil is weak, and large traders have a granular potassium chloride CIF of 330-335 US dollars/ton. In addition, more eyes of the international potash market are still locked in India. It is reported that BPC has begun contact with Indian buyers and it is expected that the results of the new contract negotiations will be released soon. Recently, Uralkali of Russia announced its production data for the first quarter. Affected by the flooding accident of the SK-2 mine, the company’s potassium fertilizer production in the first quarter decreased by 8% year-on-year to 2.7 million tons, while the potash fertilizer output in the same period in 2014 It was 2.93 million tons. In this regard, Ural related responsible person said that in addition to the decline in potash fertilizer production by the SK-2 mine flooding, the weak market demand is also an important reason. Relevant person in charge said: “The current flooding accidents are still difficult to deal with. In response to this situation, Ural will increase its marketing efforts in target markets in 2015 to increase the production capacity of other mines and strive to stabilize production at 10.2 million tons. The Israeli workers’ strike has not yet ended and the Israeli chemical industry has been shut down for several months, resulting in an extension of the arrival of potassium chloride at the port, which has a greater impact on the production and sales of potash.The reason for the strike is that the Canadian Potash Company not only owns a 14% stake in the Israeli chemical group. It also owns 28% of the shares of Jordan Potash Corp., a nearby Jordanian company. Once the merger is completed, Canada Potash will lay off its staff within the company and give more work to the Jordan factory where labor is cheaper. If the merger is completed, Potash Corp. of Canada will In the formulation of potash fertilizer prices, it has greater initiative. According to statistics, China's annual potash demand is about 10 million tons, of which imports are about 7 million tons, while India's annual demand is about 5 million tons, of which about 4 million tons is imported, and in the international potash market, both China and India are the weight of potash fertilizer. To import countries, if the project is successful, potash fertilizer producers will monopolize production and supply to a large extent, so that the price of potash will further increase, and India has expressed great concern about the progress of the project.

Domestic potash fertilizer market may continue to decline

After the recent signing of a large contract in China, successive potash contracts were finalized. On April 10, Ural Potash Corp of Russia announced that it had reached a new year's 2015 potash import agreement with Chinese importers. The price was the same as other companies. The CIF price was US$315/ton, and the supply was 850,000 tons. Potash Corp of Canada announced on March 30 that it had signed a potash contract for 2015 with Chinese importers, supplying at least 1.8 million tons of potash fertilizer to China. According to market demand, the export volume may increase to 2.5 million tons. At this point, the number of potash fertilizer contracts signed by China was 1.7 million tons for Belarus, 1.8 million tons for potassium, 600,000 tons for Jordan, and 850,000 tons for Wuka, totaling 4.95 million tons.

Since the signing of the arrogant contract, the domestic price of potassium chloride has been steadily falling, with a decrease rate of 50-100 yuan/ton. The current supply on the market has gradually increased, and the overall demand has weakened. With the increase in supply, potash prices in the market may continue to fall, which will have a certain impact on domestic producers.