Amid the dual pressures of the global energy crisis and geopolitical conflicts, the ripples in the bulk commodities market continue to transmit through the agricultural industry chain. As the 'ballast' of food production, potash is undergoing an unprecedented differentiation. Recently, in the domestic potash market, under the combined influence of the 'visible hand' of supply protection policies and the 'invisible hand' of demand structure, potassium chloride and potassium sulfate have exhibited completely different market trends. While the overall market maintains a stable pricing tone, a new supply-demand balance is quietly taking shape.

1. Concentrated supply of potassium chloride exerts pressure, prices generally fall, but locally remain firm.

The sharp fluctuations in international energy prices are like a storm sweeping through the global fertilizer industry. While domestic potash production costs are under pressure, the continuous implementation of supply guarantee policies is reshaping the market landscape. Since early March, domestic potash companies have increased their downstream supply, with the volume released exceeding one million tons in just half a month. Coupled with the concentrated release of related products such as compound fertilizers, downstream demand has gradually entered a weak period, and the contradiction between ample supply and limited demand has first appeared in the Northeast market.

The differentiation in the imported potassium chloride market is particularly evident. Russian red potassium and Russian white potassium are affected by the continuous supply of guaranteed shipments. Although the tradable supply in the hands of traders is tight, weakening demand has put pressure on prices. The price of large-granule red potassium has fallen below the policy guidance line, and the 62% white potassium price has subsequently dropped by nearly one hundred yuan, leading the national potassium chloride market into a slow downward trend. As of now, in some regions, the prices of 60% Russian red potassium and 62% Russian white potassium have both been reduced by 30-50 yuan/ton, with destination prices remaining in the ranges of 3000-3150 yuan/ton and 3150-3200 yuan/ton, respectively. In contrast, due to limited port arrivals, Lao white potassium remains tight in spot supply, and prices have stayed high and firm, with 60% and 62% potassium chloride destination prices fixed at 3050-3370 yuan/ton and 3150-3520 yuan/ton, respectively.

The supplementary rhythm of border trade and the China-Europe Railway Express cargo is also affecting the market. Border trade orders from March are still arriving in succession, and April cargo will continue to reach ports. However, as Northeast China’s spring farming demand comes to an end, the market’s available supply is gradually decreasing. Although the China-Europe Railway Express cargo is arriving steadily, prices have slightly dipped in line with port market trends, with the local price of 62% potassium chloride at the station falling by 120 yuan/ton, currently remaining at 3,150-3,200 yuan/ton.

In terms of domestic potassium chloride, companies such as Salt Lake and Zangge are operating at full capacity, ensuring supply mainly through railway transportation for stable delivery. However, market circulation supply remains tight, resulting in significant price differences across regions, with the delivered price for 60% potassium chloride ranging from 3,100 to 3,250 yuan/ton.

2. High costs have become the core driving force behind the rise in potassium sulfate prices

In stark contrast to the downward trend in the potassium chloride market, the domestic potassium sulfate market is rising against the trend, with high costs becoming the core driver of price increases. The energy crisis triggered by the Middle East geopolitical conflict has not only pushed up international crude oil and natural gas prices but has also directly impacted the raw material supply and pricing system of Mannheim potassium sulfate companies. Although some Mannheim manufacturers can obtain potassium chloride to ensure supply, the sharp increase in raw material sulfur prices continues to drive up production costs. Even if product prices rise by 50-100 yuan/ton, it is still difficult to cover costs, and many companies are caught in a sales-loss predicament. As of now, the price of 52% Mannheim potassium sulfate has risen to 4,150-4,250 yuan/ton, but market acceptance is low, and new order transactions are weak. Regarding resource-type potassium sulfate, enterprise operation is basically normal, and supply is directly delivered to downstream factories by rail. Shipments are stable but limited in volume, and tradable stock held by traders is tight, keeping prices high and stable. The price of 52% powdered potassium sulfate is quoted in the range of 3,700-3,850 yuan/ton.

3. With weakening demand, domestic potassium fertilizer prices may continue to fluctuate at high levels in the short term

The domestic potash fertilizer market is still under the policy framework of ensuring supply and stabilizing prices, with supply sources continuing to reach downstream factories directly, limiting the space for trading operations. As the spring planting season comes to an end, overall market demand weakens, and potassium chloride prices remain under downward pressure, likely continuing to fluctuate at high levels in the short term. From the supply side, the domestic weekly operating rate of potassium chloride rebounded to 46% in the mid-to-late March period, with weekly production increasing by 8.75% compared to the previous week, and port inventories remaining ample, indicating a clear marginal improvement in supply. However, although downstream compound fertilizer enterprises have steadily increased their operating rates, their purchasing is cautious and mostly based on demand replenishment, with large-scale stockpiling decreasing. Under the struggle between cost support and weak demand, potassium chloride prices are unlikely to experience significant fluctuations, and policy price limits further form a clear top constraint. Meanwhile, although the potassium sulfate market has cost support, weak demand will limit the extent of price increases, and the contradictions between production and sales may persist. Since March, potassium sulfate prices have risen by 200-250 yuan/ton, and even more in some areas, but high raw material costs mean that companies still generally face inverted sales. Weak downstream demand restricts the room for price increases, and although tradable stocks in the hands of traders are tight, they are difficult to convert into actual transactions, making the production-sales contradiction hard to alleviate in the short term.