On June 6, the annual import contract price of potash fertilizer in China in 2023 was finally settled. The China Potash Fertilizer Import Negotiation Team and the international potash fertilizer supplier Canada Potash Corporation (Canpotex) reached an agreement on the annual import contract price of potash fertilizer in 2023. The contract price is 307 US dollars (ton price, the same below) CFR, and the validity period is December 31, 2023.
The signing of the potash fertilizer contract lasted more than 3 months, and the contract price dropped by 283 US dollars compared with the previous year, which continued to maintain the "price depression" of potash fertilizer in the world. Industry insiders said that the conclusion of the new potash fertilizer contract in 2023 will provide positive guarantees for the supply of potash fertilizers for agricultural production in autumn and next spring in my country, and will also provide bottom support for domestic potash fertilizer prices.
"According to the price of the big contract and the current exchange rate, the converted port price is about 2,400 yuan (ton price, the same below) without adding any port miscellaneous fees. The current market price for potassium (content 60%) in Laos is at 2,400 to 2,450 yuan, so the price of 307 US dollars is basically in line with the recent Chinese market.” Dai Li, an analyst at Jinlianchuang Chemical Fertilizers, believes.
It is worth noting that the contract price of potash fertilizer in China and India was the same last year, both at US$590, and China reached a contract price for potash fertilizer in February last year. Industry insiders pointed out that this is because last year when the international situation was turbulent, the domestic strategy was to give priority to ensuring the supply of potash fertilizer. Although the contract price of potash fertilizer in China is higher, it is still in line with domestic expectations.
This year's potash fertilizer contract was signed two months later than last year. Industry insiders believe that, firstly, the price of potassium chloride has been falling continuously recently. Data show that in May this year, the price of potassium chloride fell from 3,400 yuan at the beginning of the month to 2,850 yuan at the end of the month, a drop of 16.18%. On May 30, the potassium chloride (import) commodity index fell by 47.27% from the high point of last year, and rose by 58.04% from the lowest point on August 6, 2020. Second, professionals are relatively pessimistic about the prediction of the price trend of potassium chloride this year. Third, the China Potash Fertilizer Import Negotiation Team also hopes to obtain a better price for domestic enterprises.
As for the future market trend of potash fertilizers, Dai Li analyzed that although the price of potassium chloride is in a downward trend recently, the speed has slowed down significantly. On the one hand, because the supply of border trade goods has not arrived in large quantities, Lao potash traders mainly hold up the price; on the other hand, because of the high concentration of supply in the market, there are not many supply in the hands of small and medium-sized traders. In the short term, the signing of large contracts is expected to provide support for the bottom price of potassium chloride. In the long run, the price of high-content potassium chloride still has room to fall. Taking 62% white potassium as an example, the mainstream price in the market is 2650-2850 yuan, while the price of potassium in Laos is 2400-2450 yuan, and the price difference has expanded to 250-400 yuan Therefore, it is recommended to focus on the recent Lao potassium customs clearance and demand follow-up.
Everbright Securities stated that the current potash fertilizer contract price is relatively close to the domestic potash fertilizer price. After a long period of decline in the early stage, the domestic potash fertilizer price is expected to stop falling and stabilize. Under the expectation that the price of potash fertilizer will gradually stabilize, leading enterprises in the industry are expected to obtain relatively stable profits by virtue of their own scale advantages and production technology. In addition, some companies have plans for new potash fertilizer production capacity in Laos and other overseas regions. After the production capacity is implemented, it will further increase the future performance of potash fertilizer companies. (Wang Lijin)
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