Global potash fertilizer prices may continue to rise

According to reports, the Belarusian potash company Belaruskali collapsed on the evening of the 9th, and the two trapped miners have died
.
Industry insiders predict that the accident may affect the global market supply of 3%-4% of potash fertilizer
.
On the other hand, the international potash fertilizer market demand may continue to pick up, and the price of potash fertilizer will rise steadily under the balance of supply and demand
.
Potash fertilizer supply or current gap on the 9th, a blowout and collapse occurred in a working face of the Belaruskali mine.
The blowouts were mainly methane gas and mineral salt.
Although rescuers tried to reduce the methane concentration on the working face and carried out rescue work, according to local media According to the latest reports, the trapped workers have been killed
.
Canadian Bank of Montreal (BMO) analyst Joel Jackson said, “Belaruskali currently has four mines of almost the same size.
The company’s potash capacity accounts for about 15% of global production, reaching 12 million tons.
If the Belarusian mine goes offline due to an accident, or It will affect 3%-4% of the global potash fertilizer market supply
.
" Affected by the news, as of the close of last Friday, U.
S.
potash fertilizer stocks Nutrien (NTR.
NYSE), Mosaic (MOS.
NYSE), CF Industry (CF.
NYSE) and Intrepid Potash (IPI.
NYSE) rose 3.
12%, 3.
52%, 1.
49% and 2.
82% respectively
.
Industry insiders analyze that the temporary supply interruption that the accident may cause may have an impact on China and India, which are large potash consuming countries
.
According to statistics from the United States Geological Survey, the global potash resources are abundant, but unevenly distributed
.
Among them, the combined reserves of Canada, Russia, and Belarus account for more than 85% of the total reserves of potash resources in the world, and the potash fertilizer output of the three countries also accounts for 70% of the total global output
.
Including Belaruskali, Canadian potash company PCS, American Mosaic and other companies all play an important role in the global potash market
.
In contrast, China’s proven potash resources account for only 2% of the world’s total reserves, and there are relatively few potash fertilizer manufacturers with potash resources.

.
Therefore, China's external dependence on potash fertilizer has remained high for a long time
.
Among them, in 2017, China imported 7.
53 million tons of potassium chloride.
During the same period, domestic potassium chloride production was 6.
8 million tons, and domestic potassium chloride supply was 11.
3 million tons
.
Demand is expected to continue to rebound.
For the international potash fertilizer market, a report issued by the German Bernstein Research Company pointed out that due to structural oversupply, after more than four years of reshuffle, future production capacity will stabilize.
“Due to strong demand, plus Manufacturers are more restrictive.
In 2018, global potash fertilizer prices are expected to continue to rise by about 2.
5%, equivalent to 1.
6 million tons, which is the same as the historical average growth rate
.
" In addition, Bernstein believes that from the perspective of the global potash market in 2017, Due to the relatively slow progress in the development of new mines, it is expected that the potash market price will steadily rise due to the influence of supply and demand
.
The recent Southeast Asian market data released by Longzhong Information also shows that the potash market in 2018 shows more signs of recovery.
“At present, the CIF price in Southeast Asia has increased by US$10/ton at both the high and low ends when the large contract was signed last year; prices in the Brazilian market The upside is even greater.
Compared with the same period last year, the high and low ends have risen sharply by US$25-30/ton, and there is a tendency to continue to rise
.
" In the domestic market, due to the boost in demand brought about by the increase in agricultural product prices, CICC It is believed that potash fertilizer prices are expected to pick up further, and the industry's prosperity is expected to rebound at the bottom
.
Pacific Securities also believes that the price of potash fertilizer will gradually rise in the context of steady growth in downstream demand and limited industry expansion
.
Among them, the domestic ex-factory price of potassium chloride increased by 15% from RMB 1,870 (the same below)/ton in August 2017 to RMB 2,150/ton in January, and is expected to continue to rise in the future
.
Pacific Securities pointed out that as the potash fertilizer market picks up, the salt lake shares (000792), which occupies half of the domestic potassium chloride production, is expected to reverse its performance
.
Zangge Holdings (000408), the second largest potassium chloride producer in China, also released a performance forecast recently.
It is expected that the net profit attributable to the parent in 2017 will be 1.
3-15 billion yuan, an increase of 42.
57%-64.
51%.

.
In this regard, Shenwan Hongyuan believes that potash fertilizer expansion and price increases and trading business contributed to the main performance increase.
"Since October, the domestic potash fertilizer market price has generally increased by 250 yuan/ton, and there is still room for increase
.
The company has a production capacity of 200 10,000 tons, every time the price difference widens by 100 yuan/ton, the earnings per share will increase by 0.
085 yuan, and the flexibility of production capacity is obvious
.