The day after India announced the landing of the large contract price, the joint negotiation team of China’s imported potash fertilizer reached an agreement with the international potash fertilizer supplier canpotex yesterday to determine the import price of standard potassium chloride in 2022 as cfr590 US dollars / ton, a year-on-year increase of 139%. The price is the same as that of the large contract in India and the current market price in China. Analysts believe that the price is in line with expectations.
The price of large contracts has reached a new high in recent years. Last year, the contract price of China’s potash fertilizer import was 247 US dollars / ton.
Li Feng, an analyst at Zhuo Chuang information, said that according to the comparison of price data over the years, the contract price of potassium fertilizer in China is generally 20-30 dollars / ton lower than the CIF price of bulk goods in Southeast Asia. Based on this judgment, the current signed price of 590 US dollars / ton is in line with expectations. In addition, the new contract price is about 60% of the standard. Since the price increase of 4200 yuan / ton for potassium chloride port and 4300-4350 yuan / ton for 62% white potassium, it is consistent with the 62% market price of Russian White potassium in the current port. It means that the psychological intention price of Chinese potash fertilizer dealers is basically consistent with the new contract price.
In addition, this price is also equivalent to that of India. In recent years, China’s large contract price has been bitten to death by India. India, like China, is a large importer of potassium chloride. India does not have a certain local production capacity like China, and the import demand is more urgent.
Last year, the price of India’s large contract was US $247, which increased twice last year and changed to US $445 at the end of 2021. Under the condition of urgent supply, India signed a new annual large contract with potash at the price of 590 US dollars / ton. China’s large contract price has not changed last year.
From the perspective of the whole international market, China has won a large contract price in accordance with the rules. At present, in order to stabilize the price of potassium chloride, the government is still conducting an auction of potassium chloride. The auction price is 3000 yuan / ton, which is far from the import price. As of February 15, the average market price of potassium chloride in China was 3475 yuan / ton, up 70.85% year-on-year. The quotation of some manufacturers was close to 4000 yuan / ton (equivalent to 630 US dollars / ton).
Last year, China took many measures to control the price rise of potassium chloride, such as punishment Qinghai Salt Lake Industry Co.Ltd(000792) and SINOCHEM. The reasons include privately raising the price, the price is much higher than the cost, etc. Qinghai Salt Lake Industry Co.Ltd(000792) has also reduced the price under pressure.
However, the global rise in potash prices will eventually be transmitted to China. High priced potash is used all over the world.
At present, it is the season of spring ploughing and fertilizer preparation. Due to the peak season of fertilizer use, there is a shortage of local supply, and the large contract price is released, which is conducive to replenishing the potassium fertilizer inventory and increasing liquidity. At present, China’s potassium chloride inventory is 258000 tons, a year-on-year decrease of 19.6%.
