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 Q3 2018
The market could currently best be described as uncomfortably inactive. With no clear price direction yet heard for either China or India long-term import contracts, buyers appear uninterested. Supply to Asia is thus steady. However, once China or India settles, demand will spike and produces are likely to send more to the region.
Once China and India contract prices settle, demand in Asia will likely spike abruptly. Although an increase is expected across the MOP complex, the degree of the hike will have enormous influence on Asian demand in Q3 - especially if buyers find China has settled $5-10/tonne below their regional market level.
The third quarter is traditionally a quieter period for the European potash market, as farmers look to the harvest, and distributors attempt to empty warehouses. Supply will likely be steady as a result, with little in the way of disruption. This low season may also lend some of the market’s newer players - such as EuroChem - time to broaden their customer network.
Q3 demand will be light for MOP in Europe, as farmers see to their crops. An increase in SOP production may buck the trend for enquiries, however, as there is talk of Latin America and southern Europe requiring an increased proportion of the high-quality crop nutrient. As a result, raw MOP demand may see a slight uptick.
It is anticipated that during the upcoming quarter that overall supply levels will increase. Additional imports are set to be arriving over the period. The US market is seen as more attractive to those volumes given the steady appreciation in the US barge and terminal values.
During the upcoming quarter, demand will get a boost as restocking of the volumes that were utilised for the spring crops will begin to come forth. The outlook right now is that restocking interests will be a tad stronger than previously seen, which could spark the market and leave demand outpacing supply.
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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.