About: Potassium Chloride is a metal halide salt which is made of potassium and chlorine. It is odourless, and in appearance, it has a white or sometimes colourless vitreous crystal appearance. This solid can be dissolved readily in water, and its solutions have a salt-like taste. It is derived from minerals sylvite, carnallite, and potash.
Get the latest insights on price movement and trend analysis of Potassium Chloride in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).
The market price for imported KCl increased in China in April by around 1.97% to settle at around 764 USD/MT.1 The prices further increased to 814 USD/MT in May but later fell by 0.30% to 811 USD/MT as the month reached to an end.
In Europe, the potassium chloride prices per ton rose sharply in Q2 2022, reaching more than 900 USD in May.3 The rise in prices was an aftermath of the Ukraine-Russia war which had caused global supply chain disruptions amid rising demand for fertilizers.
In the US, KCl market witnessed an upward trend in prices during the second quarter of 2022 as a result of a shortage in supply of raw materials. The US import demands for potassium chloride heightened, while other countries applied restrictions on their supply of the chemical. The strong demand for potassium carbonate, the downstream product of KCl put pressure on the suppliers causing prices to remain high at around 675 USD per ton by the end of July 2022 increasing by almost 1.5% from the previous month.
Brazil imported large volumes of the chemical from Russia and Belarus in spite of the soaring global prices and trade sanctions due to a high demand for fertilizers in the country for the summer grain season.
The average domestic potassium chloride prices surpassed 3,470 RMB/MT by mid-February 2022, up 70.85% year on year. Potassium supplies in China are limited, and the country's reliance on KCl imports is significant. As a result, domestic demand for the chemical is high, and enterprise production and sales are consistent. Domestic KCl stockpiles were 258,000 tonnes as of mid-February 2022, down 19.6% year over year and 38.4% since the start of the previous year. Domestic KCl demand will be discharged as spring cultivation begins, and inventories may decline even further. In addition to the foregoing, there is a short-term supply shortfall due to international sanctions against Belarus and a mismatch in worldwide supply and demand. With the onset of spring cultivation in the northern hemisphere, potash demand will be released even more, and supply will be tightened in the future.
Potassium chloride prices were stable in the Asian market in Q4 2021, owing to high demand and depleted inventories in the face of suspended production in China. Meanwhile, China's production reduction, along with a prohibition on the export of many fertilisers, remained a major factor in these price increases. On the strength of insufficient availability in the local market, the price in India was heard hovering at an all-time high in December. However, according to current statistics, MOP sales were effectively cut from fertilisers due to its soaring cost, and farmers began seeking for other alternatives to safeguard their margins. Farmers also had reported a high Rabi season yield, which had boosted confidence in India's fertiliser business. In addition, the Indian government announced increases in existing subsidies in order to maintain farmers' wellbeing. During December, the price was roughly 605.2 USD/MT.
During Q4 2021, European manufacturers had to deal with certain unusual events that shook the dynamics of the European market. The key events included a sharp spike in natural gas prices, which impacted practically all downstream derivatives pricing, such as ammonia, as well as non-derivatives. High fertiliser costs agitated major countries such as the United Kingdom, Germany, and Russia, and their governments attempted to protect consumers as food inflation began to pressurise their plates. As a result, Russia imposed export quotas on specific fertilisers in order to protect the goodwill of foreign buyers. Hence, the price in Europe remained sky high throughout the quarter, similar to the global market.
During this quarter, muriate of potash prices continued to rise over the world, notably in North America. Farmers were said to be struggling with fertiliser costs, although domestic demand from the agriculture industry remained strong. Furthermore, shipments were suspended due to decreasing trade activity, as most countries resisted trade in attempt to keep food inflation under control. High fertiliser costs in the United States continued to put inflationary pressure on consumers, with prices reaching multi-year highs throughout this quarter. As a result, potassium chloride prices were recorded hovering above 775 USD/MT in December in the United States.
Farmers saw the price of potassium and other main fertilisers used in agribusiness rise in 2021. Although some parts of the world kept costs reasonable, others, like as Brazil and the United States, saw a significant increase. When compared to pricing in early 2021, the price of a tonne of potassium in Brazil has more than tripled, and other fertilisers vital for the agricultural management of the country's numerous crops also a significant increase. The price of potassium chloride was recorded at 4.4k BRL/MT in December 2021.
Reduced cargoes from the United States, along with adverse weather, resulted in a global supply shortfall of the chemical. In India, major fertiliser producers raised prices dramatically ahead of the forthcoming kharif season. Overall, the region had high demand due to limited supply, which struggled to keep up as agricultural operations increased following the vaccine's introduction. FOB Shanghai rates rose to USD 400/MT for April delivery.
Potassium chloride prices increased significantly in the Asia Pacific region during the third quarter of 2021. In China's fertilisers market, demand remained robust in Q3. Potassium chloride prices rose significantly in August in the Indian market, owing to a stop in imports from key exporting countries with high demand. European sanctions against Belarus over human rights violations had an impact on overall supply as well as MOP contract prices in India. From July to September, the price of MOP in India increased by 92%, from 359 USD/MT to 466 USD/MT. Furthermore, the adoption of COVID limits in China's major ports aggravated the overall price situation in Asia.
Plant operations were reported to be sluggish throughout the first quarter due to harsh weather conditions and limited crop output, keeping MOP supplies steady in Europe. Potassium Chloride capacity additions of around 3.2 MTPA were expected to come onstream in the coming quarter, which expected to boost buyer attitudes. Demand remained generally subdued as agricultural market offtakes fell owing to unseasonably cold weather. Due to increased demand, certain stocks were transferred to the United States.
In the third quarter of 2021, the European market for potash showed an increased price trend. In September, the price of potash was 10% higher than in August. In Q3, the fertiliser industry's profitability was impacted by higher natural gas costs in Europe. CF Industries investigated whether an impairment charge for its operations in the United Kingdom (U.K.) was necessary. Due to high natural gas prices, two large fertiliser producers announced the closure of European fertiliser manufacturing operations in the third quarter. Increased regional price and material sourcing difficulties were caused by a number of variables.
During the first quarter of 2021, supplies of KCl in North America were scarce. The freezing winter storm in the Gulf of Mexico significantly hampered restocking efforts. Inventories were running low in the first quarter of 2021 due to increased freight rates. Due to ongoing robust demand in the North American and overseas markets, a large fertiliser company reported high potash sales volumes. However, the sales were hampered as the Canadian dollar increased. In March, the FOB price of US MOP was estimated to be around 310-320 USD/MT, up around 15-20 USD/MT from February levels.
In the third quarter of 2021, offers increased significantly, mostly in the North American market. Hurricane Ida hit the US Gulf Coast, causing several manufacturing firms to close, resulting in a shortage of supplies. Potassium chloride prices increased dramatically in Q3 as a result of strong downstream fertiliser demand and high production costs. In September, the price of potash in Illionis reached historic highs, reaching 600 USD/MT
The increased use of the chemical in fertilisers was one of the main factors driving the global market. Similarly, an increase in demand for natural foods boosted consumption of potash fertilisers, which fueled the market's expansion. Furthermore, an increase in demand from the oil and gas industry was anticipated to propel market expansion. The price of potassium chloride in January 2021 was recorded at 1.31k BRL/MT.
Potassium chloride prices rose dramatically as feedstock and crop plantation prices rose steadily across Southeast Asia. Potash exports to Asia fell sharply in the fourth quarter of 2020, owing to a lack of container availability and high ocean freight costs. Potash consumption was restricted during the quarter due to lower palm oil production in numerous Southeast Asian countries. Manpower shortages and excess inventory were also major difficulties in several countries where activities were still hampered by partial lockdowns. In China, in January 2020, the price was recorded at 320 USD/MT, and 331 USD/MT in December. The lowest price was recorded at 262 USD/MT in May.
Demand fell in Q3 due to a seasonal slump that affected market sentiments for the majority of the quarter. The market mood remained high due to active restocking by several US consumers. Despite the fact that Q4 was a poor period for the European fertiliser business, the supply of potassium chloride remained consistent. Some amounts were shipped to the United States. Players, on the other hand, predicted an improvement in the price trend in Q1, indicating greater pricing on spot purchases in January 2021.
North America, being one of the world's largest manufacturers of potassium chloride, saw strong MOP (muriate of potash) sales in the fourth quarter. In the first quarter, effective capacity utilisation exceeded demand levels, leading several US firms to cut back on production. Potash demand remained a key profit driver for many fertiliser companies in the United States, owing to rising agricultural sales. Potassium chloride prices in the United States hovered above 140 USD/MT in the fourth quarter, indicating significant improvements. Due to rising demand, Q1 deliveries were priced 40 USD/MT higher. Potash sales into the oil and gas markets were constrained, although many producers were able to manage their inventories by channeling them into the agricultural sector.
In South America, the potassium market is driven by the US mainly. In Brazil, the price remained stable despite the concern about a possible supply drop in Belarus. In August 2020, average potassium chloride prices in Brazil were recorded at 240 USD/MT.
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Chemical Formula of Potassium Chloride:
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