For the Quarter Ending September 2021
The market outlook of Caustic Potash showcased an upward trajectory in the third quarter of 2021 across the North American region backed by the firm demand from the downstream sectors. The domestic market of Caustic Potash was somewhat tight in the first half of 2021 as the major end user industries observed limited supply amid local producers trying to balance their inventories. China held the largest market share in terms of exports followed by Brazil and South Korea. China availed the material during the quarter however delays were observed due to weather conditions that packed the US gulf coast. Demand for Caustic Potash increased from the downstream household and pharmaceutical sector. The price of Caustic Potash was last assessed at USD 790/MT FOB Texas.
The prices of Caustic Potash rose effectively across the Asia Pacific region in Q3 2021. In the Indian market, Caustic Potash prices kept on climbing during the month of August and eventually skyrocketed from USD 895/mt to USD 1032/mt from July to September. Recent sanctions on Belarus for potash exports severely affected the global Caustic Potash prices. In addition, imports from South Korea and China were also affected due to high freight costs amid improving demand from their domestic markets. Moreover, taking advantage of rise in average production cost around the world, domestic manufacturers also increased their offers to improve their margin during the third quarter.
In Q3, easing covid-19 restrictions led to significant rebound in industrial activities, especially glass manufacturing segment supported by other downstream segments including food, beverage, pharmaceutical and personal care. Traders revealed that apart from domestic prices, import cost was also rising due to global freight congestion, that provided domestic manufacturers an opportunity to improve their profitability. The prices of Soda Ash in Germany reached at USD per MT in the 3rd week of August.
For the Quarter Ending June 2021
North American Caustic Potash market witnessed stable demand from downstream dye, pharma and agrochemicals sectors. Ample stock availability in USA, despite of disrupted production activities in the last quarter, maintained the price balance in Q2 2021. Meanwhile, the demand from pharma and consumer goods segment remained firm throughout the quarter. Therefore, no major fluctuation in the prices of Caustic Potash was observed during these three months, and prices fluctuated between USD 780/MT-USD 790/MT in the quarter ending June 2021.
Weak demand from downstream sectors in the month of May in India, pushed down the prices of Caustic Potash in the country. Rapid spread of contagion decreased the overall demand of Caustic Potash in India, as the implementation of lockdown by several states tumbled the market momentum during this quarter, especially in May. This condition later improved in June and prices rebounded and reached USD 817/MT in India. While in China, ample inventory levels induced a decline in prices till mid-April, which later traced an upward trajectory with improved offtakes from downstream segments like pharma and agrochemicals.
Under the firm demand outlook from downstream agrochemicals segment, prices of Caustic Potash remained strong throughout the quarter. Belarus, a major producer kept exporting a decent amount of Potash in North America and regional market, which later faced sanctions by European and North American government during mid-June, over some political issues. However, these sanctions have not impacted the market till now, but it is expected that can cause a shortage of granular potash across these two regions.
For the Quarter Ending March 2021
The demand for Caustic Potash across the region remained low during Q1 2021, although the supply remained sufficient enough to satisfy the overall demand. Demand for Caustic Potash majorly comes from dye, pharma and liquid fertilisers, and all these sectors were running on lower capacities due to deterred production due to freeze fall out in mid-February. Slackening demand and limited trade kept the Caustic Potash prices below desired levels in the region. Caustic Potash prices fell by USD 25/MT after February and settled down at USD 770/MT in March end.
The Asian market witnessed mixed sentiments across different countries, while China faced strong demand amid insufficient supply, India faced comparably lower demand throughout the quarter. Hence the price trend varied from county to country. In India, Caustic Potash prices followed a downtrend with prices ending up at USD 693.5/MT during March after rolling down by USD 53.4/MT from January. With the onset of seasonal rise in demand patterns in April and better economic returns for potassium specialties, it is expected that KOH prices will gather upward momentum in the April. The Chinese Caustic Potash offers are still below desired levels because of overall dullness in the market sentiments and limited offtakes of the product from the downstream sectors. Caustic Potash Ex-Works Shandong prices slipped to USD 820-825 per MT from USD 860 per MT offers assessed in the last week of March.
Europe had witnessed mild to low demand from downstream sectors like fertiliser and pharma, although the availability remained low as the transportation activity halted due to weather conditions across some regions, which supported the prices marginally. Also trading activities across Asia and Europe also remained in a narrow range due to congestion across prime trade routes, high freight cost and Lack of availability of containers also affected the price of Caustic Potash across the region.
For the Quarter Ending December 2020
The supply was majorly affected in Q4 2020 as the Caustic Potash market stood severely hit throughout the second half of FY 2020. A sudden slump in demand for Caustic Potash observed since the onset of COVID-19 pandemic with suppliers trying to balance their inventories amidst domestic supply outstripping demand. In India prices observed enormous fall around USD 70/MT in prices of Caustic Potash in fourth quarter, while maintaining an average of USD 859/ton, due to slow spot demand as the producers expressed concerns as consumers were purchasing in small volumes and inventories level are high.
The supply pressured to remain tight during the fourth quarter as the major end user industries observed the oversupply amid the producers tried to balance their Inventories. Olin Chlor Alkali product division (Mexico) imported the largest consignment of 1,515 MT with an approx. price of USD 450/T from U.S. the average prices in Mexican markets were remained around USD 670/T throughout the quarter. China covered the largest market share in term of exports followed by Brazil and South Korea.