The Outlook Potash is part of the extensive Fertilizer coverage and is published quarterly. This up-to-date and reliable report gives overviews, key price drivers and forecasts, demand and supply outlooks as well as any shipping movements and other key influencing factors affecting the market at the time. Both the short-term activity and longer 12 month reviews can help you to make those important commercial choices. The Outlook reports are produced by Intefer Research on behalf of ICIS.
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The Outlook Potash: Market overview
Updated to Q4 2015
The global muriate of potash (MOP) market remains under pressure entering the fourth quarter, with supply exceeding demand in nearly all regions.
Curtailments have already been seen with Mosaic reducing potash production by extending maintenance downtime at its Colonsay mine in Saskatchewan, Canada.
Currency depreciations in key import markets such as Brazil, Malaysia and Indonesia have significantly lowered demand for US dollar denominated sales of MOP.
While India has maintained imports at more stable levels than other nations, buyers are now looking to have contract prices renegotiated for remaining deliveries until March 2016 due to lower prices achieved in the spot market.
Chinese buyers will also be applying substantial downward pressure to annual negotiations in the coming months, with the recent introduction of value added tax on imports and exports.
Conversely, sulphate of potash (SOP) supply remains tight. Even with the additional, estimated 30,000 tonnes/year of supply from Tessenderlo in Belgium to become available during the quarter, all volumes are heard to be allocated, with demand still outstanding.
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The Outlook Potash news & analysis
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About The Outlook Potash
While the word “potash” is used to describe all potassium (K) based products, it most commonly refers to MOP.
Muriate of potash (MOP) or potassium chloride (KCl) can be mined directly from strata of evaporated sea beds (in Canada, Russia) or from evaporation ponds using solar energy (companies in Israel/Jordan mine from the Dead Sea) or solution-mined, which is a more expensive evaporation process but is becoming popular with newer players.
Potash comes in colours ranging from white to cream to red/light pink, depending on the mining and recovery process used.
Standard MOP is widely traded (biggest import for India and China), while granular MOP is a premium product preferred for direct application and NPK production in countries using advanced soil fertilization methods (like Brazil, Europe).
Potash is a producer-driven industry as there are only a few natural deposits located across the world, in Russia, Belarus, Canada, Israel/Jordan, and Germany. Smaller deposits are located in China, the US, the UK, Thailand (undeveloped) and there are several exploration projects being pursued in the Amazon Basin, the Congo, Ethiopia/Eritrea and the US.
Essentially, competition is limited and the industry operates more like an oligopoly where producers fix prices and cut production whenever demand softens. However, the market is slowly starting to free up since Uralkali exited its marketing joint venture (BPC) in July 2013.