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It is understood that international potassium resources and potash fertilizer supply are highly concentrated. Potash fertilizer giants such as Russia and Canada have the ability to control sales prices through limited production. In 2006, China had reached painstaking negotiations with foreign businessmen to reach an agreement that will increase the price of potash fertilizer by US$25/t on the basis of 2005, but it is still at a relatively low level in the world.
Due to the scarcity of potassium resources, the gap between supply and demand for potash fertilizer in China is very large, and imports depend on imports for a long period of time, with a dependence of 70%. In recent years, the potash fertilizer industry in Qinghai and Xinjiang has developed rapidly. Qinghai Salt Lake Group produced 1 million tons of potassium chloride in 2006, and Qinghai Zhongxin Guoan million tons of potassium sulfate and magnesium fertilizer project will have a production capacity of 300,000 tons this year, and will reach 1 million tons in 2009. Xinjiang SDIC will have 1.2 million tons of potassium sulfate. The project will be completed and put into production in 2009. After all three major potash fertilizer projects have reached production, the domestic supply and demand of potash fertilizer will be eased. However, as most of China's proven potassium resources are utilized, the demand for potash will continue to increase, and the contradiction of potash fertilizer shortage still exists. In 2006, the total output of potash fertilizer in China was 2,089,200 tons, and the self-sufficiency rate was 30%. Relevant sources predict that by the year 2011, China's potash fertilizer production capacity will probably double, and the self-supply rate of potash fertilizer will reach about 40%.
According to analysis, the price increase of imported potash fertilizer in China next year will not be too large, estimated at 20 to 30 US dollars / ton. The main reason is that first, China's import of potash fertilizer may record another record, exceeding 9 million tons. Second, the domestic production of potash fertilizer is in good condition. From January to August, cumulative production of potash fertilizer was 1,655,200 tons, which was 13.09% higher than the same period of 2006. Relatively sufficient supply will at least support the peak of fertilizer use in the spring of 2008, which will greatly increase China's potash fertilizer import negotiation status. Third, due to rising shipping costs and other reasons, the continuous price increase of domestic potash, the pressure on potassium sulfate and compound fertilizer has been very heavy. If the price of imported potassium fertilizer is too high, the downstream industry will be overwhelmed, which makes it difficult for China to accept higher import prices.
Since this year, due to strong demand, the global potash fertilizer market has risen sharply. So far, the import prices of major producing countries, such as Canada, Russia, and Israel, as well as importing countries such as India and Brazil have generally increased their import prices by more than 50 US dollars/ton. Therefore, industry insiders predict that next year's rise in China's potash fertilizer import prices is a foregone conclusion.