For the Quarter Ending June 2021
During the second quarter of 2021, Muriate of Potash (MOP) demand in the North American region surged as the offtakes from the agricultural sector surged to cope up with the seasonal enquiries from the domestic and overseas market. Supplies witnessed a some hinderance as the US Mosaic shut its K1 and K2 mines in Esterhazy Canada and resumed the production in Colonsay (Canada) Potash mines. Whereas the Canadian potash giant Nutrien announced that it is estimated to surge the Potash production by 0.5 million tonnes in the second half of 2021 to cope up with the surging global demand and tightening supplies. Due to robust demand and tight market supplies in the North American region, Potassium Chloride prices surge to USD 476 per tonne in Q2.
The regional Potassium Chloride demand outlook reported robust growth in Q2 while prices observed a multi-fold hike as offtakes surged drastically from the agricultural sector in the Indian markets ahead of the upcoming Kharif/Monsoon crops in India. As a ripple effect, Potassium Chloride prices in the Indian market surged significantly early in Q2 with Ex-Depot Ahmedabad discussions settling at USD 280 per tonne in April, showing phenomenal gains over the levels seen in Q1. The Chinese Potash market also reported magnificent gains during the quarter due to strong demand from the fertilizer segment. Supplies were curtailed as imports from North America due tightness in the regional supply.
The regional Potash traders feared lack of market supply after the EU council announced to impose 4th
round of sanctions on Belarus, the key Potash exporter. The threat of sanctions on Belarusian Potash spurred panic-buying in some European markets. Potassium Chloride prices touched fresh hikes due to global surge in the rates. However, considerable fall in shipping charges in the Atlantic region made the import cargoes more feasible in the second quarter of 2021. Demand surged in the domestic market amidst strong enquiries from the agricultural sector.
For the Quarter Ending March 2021
The North American potassium Chloride market witnessed tight supplies during Q1 2021. Restocking activities were severely impacted by the freeze winter storm in the USA Gulf region. Inventories were running low on the back of surged freight charges throughout the first quarter of 2021. A leading fertilizer producer reported high Potash sales volumes due to continued strong demand in the North American and offshore markets. The sales however, faced headwinds from strengthening of thde Canadian dollar. US MOP price was assessed around USD 310-320 per tonne in March on FOB basis, showing an increase of over $15-20/mt over February levels.
Reduced cargoes from the USA amid bad weather conditions created a global supply shortage of Potassium chloride. In India, key fertilizers manufacturers hiked the prices steeply ahead of the upcoming ‘kharif season’. Overall, the region observed robust demand due to tight supplies which struggled to keep pace as agricultural activities ramped up after the vaccine rollout. The FOB Shanghai prices for April deliveries were surged to USD 400/MT.
MOP supplies in Europe were stable during the first quarter, as plant operations were reported sluggish throughout the quarter due to the extreme weather conditions and suppressed agricultural output. Around 3.2 MTPA capacity addition of Potassium Chloride capacity is estimated to come onstream in the upcoming quarter that raised the buyer’s sentiments. Demand remained largely suppressed as the offtakes from the agricultural market declined due to unsuitable cold weather. Some stocks were redirected to United States due to stronger demand.
For the Quarter Ending December 2020
Consistent hike in the prices of feedstock and crop plantations across Southeast Asia provided an astonishing upward push to the prices of Potassium Chloride. Potash offers shipped to Asia dropped substantially in the final quarter of 2020 exacerbated by shortage of container availability and high ocean freight. Reduced palm oil production in several southeast Asian countries significantly hampered the potash consumption during the quarter. Lack of manpower and surplus inventories were other key concerns in some countries where operations remained impacted due to partial lockdowns.
North America being of the biggest producers of potassium chloride in the world, reported robust MOP sales during the fourth quarter. Effective capacity utilization exceeded demand levels initially in the quarter forcing some US producers to function through production curtailments. The demand for Potash remained a key profit driver for many fertilizer producers across the US due to higher sales to the agricultural segment. MOP price stood around USD 140 per tonne in the US showing multiple gains in the fourth quarter. Q1 deliveries were priced higher by USD 40 per tonne amid escalating demand. Potash sales into oil and gas markets remained pressured, however many producers could manage sales by channelizing their inventories to the agricultural sector.
The supply of Potassium Chloride stood stable in Q4, despite being a low period for the European fertilizer industry. Some volumes were exported to the western region. Demand slipped over Q3 amidst seasonal lull affecting the market sentiments for a larger part of the quarter. Active restocking by some US consumers kept the market sentiments high. However, players expected improvement in the price trend moving into Q1 indicating towards higher pricing on spot purchases in January 2021.