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 Q1 2018
Availability in Asia was tight throughout Q4 and the situation is likely to continue into Q1. However, with negotiations for Q1 and 2018 now in full-swing, it is likely the first new cargoes will start arriving this quarter, sating the region’s considerable demand. That said, a lack of available tonnage and high fuel costs are likely to continue to prevent easy trade, and many buyers may struggle to secure cargoes on a prompt basis.
Tender activity started in earnest towards the end of Q4, and more business is expected throughout Q1 - notably from large plantations and conglomerates of buyers looking for good-quality MOP at an agreeable price. Indian and Chinese contract prices are expected to settle at an increase thanks to prevailing market conditions. Southeast Asian buyers are likely to be wary that these two key importers may consume a large quantity of available product, and will look to stock up ahead of any agreement.
As Europe moves into the spring planting and application season, supply to the region is likely to increase. Producers and buyers alike expect a lack of availability to put upward pressure on prices, even as buyers return to refill their stores with each subsequent application. Global potential capacity is still at an oversupply, but production control and the pursuit of good margins has kept supply steady and largely reliable - a situation likely to continue throughout the first quarter.
European MOP demand will see a steady increase throughout Q1, as buyers look to keep their stocks up and end-users prepare the fields for the planting season. We predict no let-up in demand until at least the end of the quarter.
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The Outlook Potash news & analysis
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The Outlook Methodology
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.