Demand From Downstream Industries Influences Market Sentiment For Caustic Potash

Caustic Potash prices in the United States were stable in the last week of May after continuing to grow the previous week due to strong demand from the fertilizer industry in the US domestic market, as it is utilized in the production of liquid fertilizers and is classified as an agrochemical. The ongoing planting season in the United States and Germany has increased fertilizer offtakes on the market. The increase in demand from downstream industries such as agriculture and supply disruptions owing to the lockdown in China due to mounting COVID instances resulted in an increased price movement of Caustic Potash on the local Chinese market.

During the closure of market activity in China, manufacturers engaged in retraining from stockpiling stocks. The lockdown has even halted internal and external trading activities in China, which has led to disruption in supplies of Caustic potash in the Chinese market amidst high demand from agriculture in Asian countries. The price of Caustic Potash surged in China in the month of May. Due to which, China is witnessing stability in COVID-19 cases, a slight relaxation in imposed lockdown restrictions can be seen in China.

Prices of Caustic Potash were constant week on week in the last week of May, according to the ChemAnalyst database. Traders reported little inventory pressure, and steady improvements in manufacturing operations in the United States resulted in stable demand fundamentals for the commodity despite ample supplies.

"Prices of Caustic potash are expected to rise in the European market due to soaring energy costs amid supply disruption from Russia due to geopolitical tension," according to ChemAnalyst. Prices of Chinese Caustic Potash are predicted to fall as COVID limitations are eased, owing to a drop in COVID 19 cases in the country." Furthermore, due to the continuing sowing season in the United States, demand for fertiliser is expected to increase in May.