For the Quarter Ending in June 2022
North American market saw a price rise of Potassium Chloride during Q2, 2022 with costs ranging at USD 605/ton Potassium Chloride Technical DEL Illinois during May in the USA with a quarterly escalation of 12.8% as per recorded by Chem Analyst pricing team data. The consumers rigidly demanded the downstream sector procurement, and the overall inventory was primarily low, within the market widening its prices. With the increased demand for downstream Potassium Carbonate, the prices of upstream feedstock Muriate of Potash surged, putting cost pressure on the product within the regional market. The varying global freight charges due to the ongoing war between Russia and Ukraine were one of the primary reasons for the prices to surge.
The prices of Potassium Chloride surged in the Asian market during the second quarter of 2022, and prices were hovering around INR 50025.00/ton with the quarterly escalation of 2.4% for Technical Grade Ex-Ahmedabad in India during May, recorded by Chem Analyst pricing team data. Due to limited and tight supply, Pottasium Chloride prices continued to increase in the Chinese market. With support from the international potash fertilizer market, it is unlikely that the potassium market will fall. Overall, the downstream market for Potassium Chloride rose slightly, and the downstream demand for the product was good.
Potassium Chloride prices rose in the European market during Q2 2022, with costs ranging from USD 540/ton. Potassium Chloride Technical FOB Hamburg in Germany during May with a quarterly escalation of 27.4% as recorded by Chem Analyst pricing team data. Escalating imports from Poland, Brazil, Belgium, and France for the various downstream uses of the product in fertilizers and surface coating industry supported the market in an upward trend. This led to falling inventories and fewer products stockpiling with the traders and suppliers in the regional market. The demand for the product exceeded the supply, the atmosphere was hot, and the downstream purchasing was just in request.
For the Quarter Ending March 2022
The price of Potassium Chloride rose to USD 750/ton DEL Illinois in the USA by the end of the first quarter of 2022. Farmers were seen to be battling with fertilizer costs, while domestic demand remained high in agricultural sectors. The price change was 6.8% in Q1 as compared to Q4 of 2021 in the USA. KCl prices have gained cost support in Q1 owing to limited supply and robust demand fundamentals. Exports from Canada have also been costly to the USA, which further curtailed the margins of market participants. Demand push from the consumers has sent the prices into an upward spiral causing the prices to remain firm towards the end of Q1.
During the first quarter of 2022, the price of Potassium Chloride was assessed at USD 315/ton FOB Hamburg and increased to 2.6% in Germany as compared to prices of Q4, 2021. Belarus being the major exporter of KCl, affected the prices as Belarusian Potash export restrictions constrained the global market sentiment and ended carve-outs on existing sanctions on Belarus's export of potash. Healthy buying sentiment from the downstream market, such as personal care, pet care, and non-pesticidal agricultural chemicals, and hampered availability of raw materials resulted in surging prices. Strong market sentiments and insufficient product availability surged the prices of Potassium Chloride in the market.
The prices of Potassium Chloride rose due to increasing imports from China and India due to robust demand. In India, the prices of raw material, Potassium, increased in the quarter ending March 2022 with its increased consumption in downstream agricultural, soap, and detergent industries. Production snags jeopardized revenue and sales among the major producers of Potassium Chloride. Global scarcity and freight pressure remained to be a significant factor behind the steep rise in prices of several commodities, including KCl. Meanwhile, soaring crude oil value also remained to be a major concern for the global key players as it puts inflationary pressure on manufacturers and compelled them to revise their spot offers to sustain margin. The price change was stable at around 0.2% in India in Q1 of 2022 compared to Q4 of 2021.
For the Quarter Ending December 2021
Muriate of potash prices kept on rising across global market including North America during this quarter. Farmers heard battling with fertilizer cost, while domestic demand remained high from agriculture sector. Furthermore, shipments remained halted due to lower trade activities, as most of the countries resisting trade in order to control country’s food inflation. In USA, high fertilizers cost kept on putting inflationary pressure on consumers and the prices reached multiyear high value during this quarter. Thus, after witnessing an exponential surge in MOP price heard hovering around USD 775/MT during December in USA.
Muriate of potash remained firm for Asian market too during Q4 2021, on the back of high demand and depleting inventories amid halted production activities in China. Meanwhile, production cuts imposed by China coupled with export ban on several fertilizers, remained a major reason behind these surges. Potassium Chloride price in India heard hovering at a sky-high value during December, on the back of inadequate availability in the domestic market. However, as per recent stats, MOP sales was reduced from fertilizers effectively due to its soaring cost, while farmers started looking for other alternates in order to protect their margin. In addition, healthy output of Rabi season was witnessed by farmers, which has enhanced the optimism across fertilizer sector in India. Furthermore, Indian government announced hikes in their existing subsidy to protect farmers’ welfare. Potassium Chloride price stood around USD 605.2/MT during December.
European maker had to face some uncommon events, which shook dynamics of European market during Q4 2021. The major events include steep hike in natural gas prices, which increased prices of almost all the downstream derivatives prices like ammonia and also influenced non derivatives. High fertilizers cost tensed major economies including UK, Germany and Russia, and their government were trying to safeguard consumers, as food inflation started pressurising their plates. Therefore, Russia also introduces export quota on some fertilizers to safeguard countries consumers’ goodwill. Conclusively, similar to global market, Potassium Chloride price remained sky high throughout the quarter across European region.
Offers for Potassium Chloride witnessed an upward trajectory in the third quarter of 2021 mostly throughout the North American region. The occurrence of Hurricane Ida in the US Gulf coast led to shutdowns of several manufacturing plants which resulted in a tight supply. Prices rose significantly during Q3 on the back of the strong demand from the downstream fertilizer and high production cost. Consumers feared that higher fertilizer prices will translate into higher cost of production of corn and soybeans. Potash (Dry) price in the Illionis (US) touched $600/mt in September, at its historic highs in the last few years.
In the Asia Pacific region, the prices of Potassium Chloride rose effectively during Q3 of 2021. Demand for Potassium Chloride remained strong in Q3 from the fertilizers segment in China. In the Indian market, MOP prices gained a significant value in August, supported by halted import activities from major exporting countries with high demand. European sanctions on Belarus due to human rights issues affected the overall supply as well as the contract prices of MOP in India. The price of MOP (92%) shot up from USD 359/MT to USD 466/MT within India from July to September. In addition, implementations of COVID restrictions across major ports of China exacerbated the overall price scenario across Asia.
The European market demonstrated an upward price trend of Potash in the 3rd quarter of 2021. The price of Potash was 10% higher in September compared to August. Increased natural gas prices in Europe altered the profitability of the fertilizer business in Q3. CF Industries considered the evaluation of whether an impairment charge w.r.t its business in the United Kingdom (U.K.) may be required. Two major fertilizer producers announced shutdowns at European fertilizer manufacturing units during Q3 due to high natural gas prices. A number of factors contributed to increased regional pricing and difficulty in material sourcing.