The global distribution of potassium resources is uneven, and the price has reached an all-time high. In 2021, the global potash supply was 50 million tons of K2O, and the global potash fertilizer output in 2021 was 46 million tons of K2O, a year-on-year increase of 4.5%. The global production and supply of potash fertilizer are highly concentrated. Only 14 countries produce potash fertilizer, of which Canada, Russia and Belarus account for 30%, 20% and 17% respectively; The production capacity of overseas potash fertilizer enterprises accounts for 83% of the top seven in the world. Since 2020, the global epidemic has led to a significant increase in the attention of countries to food security. In addition, the continuous rise of sea freight and other effects have promoted the demand and price of potash fertilizer to gradually rise. In addition, the recent EU and the United States sanctions on Belarus potash fertilizer and the conflict between Russia and Ukraine have made the global potash fertilizer market reach a 10-year historical high price.
China is short of potash resources, with an import dependence of more than 50%. Large contracts have been signed to ensure global price depression. Chinese enterprises have established overseas potash fertilizer production bases through “going global”. At present, they have achieved initial results to feed back China. In 2021, China’s output of potash fertilizer was about 6.5 million tons, its import volume was 7.566 million tons, its apparent consumption reached 13.84 million tons, and its import dependence exceeded 50%. The most important potash fertilizer producer in China is Qinghai Salt Lake Industry Co.Ltd(000792) , with a production capacity of 5.5 million tons / year; The existing potash fertilizer capacity of overseas Lao Chinese enterprises is 1.5 million tons / year, which is expected to reach about 5 million tons / year by 2025, which is expected to further feed China.
With the superposition of global inflation, countries have significantly increased their attention to food security. The Shenzhen Agricultural Products Group Co.Ltd(000061) price has risen sharply, driving the demand and price of agrochemical products. There is still room for the price of overseas potash fertilizer to rise. According to nutrien’s annual report data, at present, the rise of overseas Shenzhen Agricultural Products Group Co.Ltd(000061) prices exceeds expectations. It is expected that the prices of wheat, cotton, corn and soybean in the United States will increase by 44.6%, 34.3%, 22.5% and 19.3% respectively year-on-year in the 21st / 22nd crop year. The planting profit margins of Canadian rape and Brazilian soybean are also at the highest level since 2019. On the one hand, the increase of planting profit margin increases the demand and cost investment of agrochemical products; On the other hand, improve farmers’ planting enthusiasm and increase the planting area of crops.
Related targets: Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) , Qinghai Salt Lake Industry Co.Ltd(000792) , with potash fertilizer capacity are recommended.
Risk tips: macroeconomic fluctuations, local regional conflicts, infectious diseases and other systemic risks; The construction progress of new capacity of potash fertilizer may be lower than expected; The high price of potash fertilizer leads to lower downstream demand than expected.
